UNDERSTANDING POSTING GROUPS IN MICROSOFT DYNAMICS NAV

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BDO

Posting Groups in Microsoft Dynamics NAV are used to create links between the different application areas (Inventory, Customers, and Vendors etc.) and the General Ledger (G/L) application area. As a result, you must have set up the chart of accounts before you can create Posting Groups. When sales, purchases, and other transactions are recorded and posted where a specific G/L Account is not specified directly, Posting Groups provide the mapping to the correct accounts. For example, in the sale of an item to a customer on a Sales Order, no general ledger accounts are specified directly. However, upon completing the Navigate function, the review of a posted invoice shows entries that were posted to the G/L. This occurs because the customers and items were assigned Posting Groups to identify the G/L accounts.

There are two major types of Posting Groups that deal with selling inventory and resources to customers and buying inventory from vendors:

  • General Posting Groups
  • Specific Posting Groups

General Posting Groups

General Posting Groups are added to Customers, Vendors, Items and Resources to link item and/or resource transactions from purchases and sales documents as well as item journals and job journals to the G/L.

  • General Business Posting Groups: Specifies “who we sell to” (Customers) and “who we buy from” (Vendors).
  • General Product Posting Groups: Specifies “what we sell” (Items and Resources) or “what we buy” (Items).
  • General Posting Setup: A matrix window that combines business and product Posting Groups. With each combination the user can determine to which accounts the program will post:
    • Sales and Purchases
    • Sales and Purchase Credit Memos
    • Sales and Purchase invoice discounts and payments discounts
    • Sales and Purchase Prepayments
    • Cost of Goods Sold and Inventory Adjustments
  • Direct Cost Applied and Overhead Applied
  • Purchase Variances

There are exceptions, but typically the General Posting Setup matrix is used to designate the income statement accounts to which you will post. For each combination of business and product Posting Groups you can assign a different set of G/L accounts. You can post the sale of the same item to different sales accounts in the G/L due to customers being assigned different business Posting Groups. You may use the same G/L account for different combinations, enabling you to use posting group filters on reports.

General Business Posting Groups

You assign business Posting Groups to customers and vendors. In the General Business Posting Groups window, you enter a code and a description for the 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 various logical categories such as geographical area (Domestic, EU Countries, Overseas, and so on) or the type of business (retail, industrial, wholesale, service) or to distinguish between private entities and government agencies or any other logical grouping.

General Product Posting Groups

You assign product Posting Groups to items and resources. In the Gen. Product Posting Groups window, you enter a code and a description for the posting group.

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, and so on. The Product Posting Groups provide the major product groups for the items and resources being sold. Each Inventory Item and Resource is assigned a Product Posting Group.

General Posting Setup

In the General Posting Setup window, for each combination of business and product Posting Groups, you can assign a different set of G/L accounts. As a result, it is possible to post the sale of the same item to different sales accounts in the G/L due to customers being assigned different business Posting Groups.

If using inventory, in addition to entering every possible combination of General Business and General Product Posting Groups, you should enter a line for each General Product Posting Group with a blank General Business Posting Group assigned. An instance when this combination is necessary is for posting activity from Item journals when there is not a Customer or Vendor assigned to the transaction.

Specific Posting Groups

The purpose of the Specific Posting Groups is to link the subsidiary ledgers (for example the customer ledger entries) to the general ledger. When customer ledger entries are created, the Posting Groups ensure that corresponding entries are made in the general ledger.

There are Specific Posting Groups for the following:

  • Customers: This posting group maps the accounts receivable account, payment discount accounts, invoice and application rounding accounts, interest and fee accounts relating to customers.
  • Vendors: This posting group maps the accounts payable account, payment discount accounts, invoice and application rounding accounts, interest and fee accounts relating to vendors.
  • Inventory: This posting group is used to map the inventory to the appropriate G/L Accounts. Each Inventory Posting Group is then combined with each appropriate Location Code in the Inventory Posting Setup window. For each combination you can map the inventory accounts, WIP account and other variance accounts relating to inventory in the Chart of Accounts.
  • Bank Accounts: This posting group maps a bank G/L account to a bank account in the program.
  • Fixed Assets: This posting group specifies the accounts to which the program posts transactions involving fixed assets.

Shirley Wiens
Senior Consultant


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