One of the first actions many users take with a new Microsoft Dynamics NAV solution is creating a general ledger (G/L) account. If you want to set up a new chart of accounts or add new accounts to an existing chart of accounts, you must set up each account individually. You can set up G/L accounts in the Chart of Accounts window or on a G/L account card. The Chart of Accounts provides quick and easy access to the G/L accounts and balances. In the Chart of Accounts list you can view one account at a time. The G/L Account Card for each account is accessed from the Chart of Accounts list.
Let’s proceed to Search box and enter in Chart of Accounts.
Here you can specify whether the account is classified as an income statement or a balance sheet. This field is really important especially when closing the year-end.
What is the account type?
This will indicate the purpose for the account. Only the first type of posting represents an account that you can post to. Use the others to create totals and headings in the Chart of Accounts list page. These totals can also be used when creating Financial Statements in the Account Schedules.
You can choose the following options:
- Posting: The only account type where entries can be posted.
- Heading: Used for description and reporting purposes only.
- Total: Used to total the accounts nominated in the Totaling field. Used when the accounts to be totaled don’t directly precede the Total Account. It can also be used to total accounts from various sections of the chart.
- Begin-Total: Marks the beginning of an account range in the Totaling field.
- End-Total: Marks the end of an account range in the Totaling field.
Can you insert blank lines in an Account Schedule report?
Yes, you can insert a value in the “No. of Blank Lines” field.
How do you prevent entries from posting to this account?
Check the Blocked field, and the account can be blocked or reopened as needed.
What is the difference between the General Business Posting Group and the General Product Posting Group in the Posting FastTab?
General Business Posting Group: Identifies the default general business posting group for the account. It specifies “who we sell to” (Customers) and “who we buy from” (Vendors). When there is no customer or vendor involved in a transaction, the program will use the G/L account’s general business posting group.
When setting up business groups you must consider:
- How many groups you need for breaking down sales by customers.
- How many groups you need for breaking down purchases by vendors.
The business groups can be set up to group customers and vendors by geographical area (Domestic, EU Countries/Regions, Overseas, etc.), business type (retail, industrial, wholesale, service) or to distinguish between private entities and government agencies. The number of groups are directly related to the Chart of Accounts.
If you do not want to differentiate sales and purchases by customers or vendors, it is not necessary to set up any General Business Posting Groups.
General Product Posting Group: Identifies the default general product posting group for the account. It specifies “what we sell” (Item and Resources) or “what we buy” (Items). The general product posting group of an item takes priority over the G/L account’s general product posting group. Some clients may not post a sale against a G/L account – it will always be an Item, Service, or Fixed Asset, therefore the Product Posting Groups will be defaulted from those entities rather than the G/L.
When setting up product groups, you must consider:
- How many groups you need for breaking down sales by products (items and resources).
- How many groups you need for breaking down purchases by items.
Examples of how Product Posting Groups can be divided are: Raw Materials, Retail, Resources, Capacities, etc. The Product Posting Groups provide the major product groups reflected in the Chart of Accounts. Each Inventory Item and Resource is assigned a Product Posting Group.
If you only use the G/L application area, it is not necessary to set up posting groups. You must have set up the chart of accounts before you can create posting groups.
Just remember Posting Groups provide the mapping to the correct accounts. Have fun creating your new accounts!
The General Posting Setup is used to determine the Profit and Loss accounts a sale or purchase transaction will hit. The General Business Posting Group and the General Product Posting group of the transaction are used in the General Posting Setup to select the G/L Accounts to post the transaction to.
Stay tuned for more exciting topics in our NAV 101 series, such as G/L setup, journal entry setup, and more!