Set up posting groups

Posting groups map entities to general ledger accounts. Examples of entities are customers, vendors, items, resources, and sales and purchase documents. Posting groups save time and help avoid mistakes when you post transactions. The transaction values go to the accounts specified in the posting group for that particular entity. The only requirement is that you have a chart of accounts.

Posting groups are covered under three umbrellas:

• General

  Define who you sell to and buy from, and what you sell and what you buy. You can also combine groups to specify things like the income statement accounts to post to, or use groups to filter reports.

• Specific

  Use sales documents, for example, instead of posting directly to the general ledger. When you create entries in the customer ledger, corresponding entries are made in the general ledger.

• Tax

  Define the tax percentages and calculation types that apply to who you sell to and buy from, and what you sell and what you buy.

The following sections describe the posting groups under each umbrella.

General posting groups

The following table describes the general posting groups.

Specific posting groups

The following table describes the posting groups that are specific to types of data.

Allow substitute customer or vendor posting groups on documents

You can let people choose other customer and vendor posting groups than the default groups when they're working with sales or purchase documents and journals.

To allow changes to customer posting groups, choose Allow Multiple Posting Groups on the Sales & Receivable Setup and Service Mgt. Setup pages, and the Purchase & Payables Setup page for vendor posting group changes.

On the Customer Posting Groups or Vendor Posting Groups pages, you can specify the posting groups to allow as substitutes by choosing Substitutions. Substitute posting groups can replace the default customer or vendor posting groups specified for a customer or vendor.

After you set this up, you can choose from the allowed substitute posting groups and change the customer or vendor posting group when posting sales or purchase documents and journals. The substitute customer or vendor posting groups are copied to posted documents and journals, and payable or receivable G/L entries are posted to the G/L accounts specified for the substitutes.

When applying, for example, an invoice and payment that are posted with different customer or vendor posting groups (different G/L accounts), Business Central transfers the amounts between the G/L accounts to balance them.

Tax posting groups

The following table describes the tax-related posting groups.

If your country/region uses value-added tax (VAT)refer to the VAT Posting Groups

Check the VAT posting setup

To support your fast start, Business Central notifies you of missing general ledger (G/L) accounts in posting groups or posting setups, such as on the VAT Posting Setup page. You can turn this type of notification on or off using the G/L Account is missing in posting group or setup notification in the My Notifications page. Just go to the My settings page, and then choose the Change when I receive notifications link.

If you choose the notification, Business Central creates posting setups based on the posting groups in the document or journal you're currently working on.

At this point, you can just fill in the missing G/L accounts. But, when you further refine your setup later, you might realize your initial setup is wrong. Business Central doesn't allow you to delete a VAT posting setup and general posting setup after they're used to create entries. To prevent people from mistakenly using a setup that's no longer relevant for new postings, you can use the Blocked field on the General Posting Setup page.

Set up VAT business posting groups

VAT business posting groups should represent the markets in which you do business with customers and vendors, and define how to calculate and post VAT in each market. Examples of VAT business posting groups are Domestic and European Union (EU).

Use codes that are easy to remember and describe the business posting group, such as EU, Non-EU, or Domestic. Each code must be unique, meaning you can set up as many codes as you need, but you can't have the same code more than once in a table.

To set up a VAT business posting group, follow these steps:

1. Choose the  icon, enter VAT Business Posting Groups, and then choose the related link.

2. Fill in the fields as necessary.

You can set up default VAT business posting groups by linking them to general business posting groups. Business Central automatically assigns the VAT business posting group when you assign the business posting group to a customer, vendor, or general ledger account.

Set up VAT product posting groups

VAT product posting groups represent the items and resources you buy or sell, and determine how to calculate and post VAT according to the type of item or resource.

It's a good idea to use codes that are easy to remember and describe the rate, such as NO-VAT or Zero, VAT10 or Reduced for 10 percent VAT, and VAT25 or Standard for 25 percent.

To set up a VAT business posting group, follow these steps:

1. Choose the  icon, enter VAT Product Posting Groups, and then choose the related link.

2. Fill in the fields as necessary.

Combine VAT posting groups in VAT posting setups

Business Central calculates VAT amounts on sales and purchases based on VAT posting setups, which are combinations of VAT business and product posting groups. For each combination, you can specify the VAT percent, VAT calculation type, and general ledger accounts for posting VAT for sales, purchases, and reverse charges. You can also specify whether to recalculate VAT when a payment discount is applied or received.

Set up as many combinations as you need. To group VAT posting setup combinations with similar attributes, define a VAT Identifier for each group, and assign the identifier to the group members.

To combine VAT posting setups, follow these steps:

1. Choose the  icon, enter VAT Posting Setup, and then choose the related link.

2. Fill in the fields as necessary. Hover over a field to read a short description.

Assign VAT posting groups by default to multiple entities

If you want to apply the same VAT posting groups to multiple entities, you can set up Business Central to do so by default.

• You can assign VAT business posting groups to general business posting groups, or customer or vendor templates.

• You can assign VAT product posting groups on general product posting groups.

The VAT business or product posting group is assigned when you choose a business or product posting group for a customer, vendor, item, or resource.

Assign VAT posting groups to accounts, customers, vendors, items, and resources

The following sections describe how to assign VAT posting groups to individual entities.

To assign VAT posting groups to individual general ledger accounts

1. Choose the  icon, enter Chart of Accounts, and then choose the related link.

2. Open the G/L Account card for the account.

3. On the Posting FastTab, in the Gen. Posting Type field, choose either Sale or Purchase.

4. Choose the VAT posting groups to use for the sales or purchase account.

To assign VAT business posting groups to customers and vendors

1. Choose the  icon, enter Customer or Vendor, and then choose the related link.

2. On the Customer or Vendor card, expand the Invoicing FastTab.

3. Choose the VAT business posting group.

To assign VAT product posting groups to individual items and resources

1. Choose the  icon, enter Item or Resource, and then choose the related link.

2. Do one of the following steps:

   • On the Item card, expand the Price & Posting FastTab, and then choose Show more to display the VAT Product Posting Group field.

   • On the Resource card, expand the Invoicing FastTab.

3. Choose the VAT product posting group.

Set up clauses to explain VAT exemption or nonstandard VAT rates

You set up a VAT clause to describe information about the type of VAT that is being applied. Government regulations might require this information. After you set up a VAT clause and associate it with a VAT posting setup, the VAT clause displays on printed sales documents that use the VAT posting group setup.

If needed, you can also specify how to translate VAT clauses to other languages. When you create and print a sales document that contains a VAT identifier, the document includes the translated VAT clause. The language code specified on the customer card determines the language.

When you use nonstandard VAT rates in different types of documents, such as invoices or credit memos, you might have to include an exemption text (VAT clause). The exemption text states why you calculated a reduced VAT or zero VAT rate. You can define different VAT clauses to include on business documents for each type of document on the VAT Clauses by Document Type page.

You can modify or delete a VAT clause, and your modifications are reflected in a generated report. However, Business Central doesn't keep a history of the change. On the report, the VAT clause descriptions are printed and displayed for all lines in the report alongside the VAT amount and the VAT base amount. If a VAT clause isn't defined for any lines on the sales document, the whole section is omitted when you print the report.

To set up VAT clauses

1. Choose the  icon, enter VAT Clauses, and then choose the related link.

2. On the VAT Clauses page, create a new line.

3. In the Code field, enter an identifier for the clause. You use this code to assign the clause to VAT posting groups.

4. In the Description field, enter the VAT exemption text that you want to display on documents that can include VAT. In the Description 2 field, enter more text, if needed. The text is displayed on new document lines.

5. Choose the Description by document type action.

6. On the VAT Clauses by Document Type page, fill in the fields to set up which VAT exemption text to display for which document type.

7. Optional: To assign the VAT clause to a VAT posting setup right away, choose Setup, and then choose the clause. If you want to wait, you can assign the clause later on the VAT Posting Setup page.

8. Optional: To specify how to translate the VAT clause, choose the Translations action.

To assign a VAT clause to a VAT posting setup

1. Choose the  icon, enter VAT Posting Setup, and then choose the related link.

2. In the VAT Clause column, choose the clause to use for each VAT posting setup it applies to.

To specify translations for VAT clauses

1. Choose the  icon, enter VAT Clauses, and then choose the related link.

2. Choose the Translations action.

3. In the Language Code field, choose the language you're translating to.

4. In the Description and Description 2 fields, enter the translations of the descriptions. This text displays in the translated VAT report documents.

To specify extended text for VAT clauses

1. Choose the  icon, enter VAT Clauses, and then choose the related link.

2. Choose the Extended Texts action.

3. Choose the New action.

4. Fill in the Language Code and Description fields.

5. Optionally, select the All Language Codes field, or specify the relevant language in the Language Code field if you use language codes.

6. Fill in the Starting Date and Ending Date fields if you want to limit the dates on which the extended text is used.

7. In the Text lines, write the extended text for your VAT clauses.

8. Select the relevant fields for the document types where you want the extended text printed.

9. Close the page.

Create a VAT posting setup to handle Import VAT

Use the Import VAT feature when you need to post a document where the entire amount is VAT. You use this feature if you receive an invoice from the tax authorities for VAT for imported goods.

To set up codes for import VAT, follow these steps:

1. Choose the  icon, enter VAT Product Posting Groups, and then choose the related link.

2. On the VAT Product Posting Groups page, set up a new VAT product posting group for import VAT.

3. Choose the  icon, enter VAT Posting Setup, and then choose the related link.

4. On the VAT Posting Setup page, create a new line, or use an existing VAT business posting groups in combination with the new VAT product posting group for import VAT.

5. In the VAT Calculation Type field, choose Full VAT.

6. In the Purchase VAT Account field, enter the general ledger account to use for posting import VAT. All other accounts are optional.

Use reverse charge VAT for trade between EU countries/regions

Some companies must use reverse charge VAT when trading with other companies. For example, this rule applies to purchases from EU countries/regions and sales to EU countries/regions.

Sales to EU countries/regions

VAT isn't calculated on sales to VAT-liable companies in other EU countries/regions. You must report the value of these sales to EU countries/regions separately on your VAT statement.

To correctly calculate VAT on sales to EU countries/regions, you should:

• Set up a line for sales with the same information for purchases. If you set up lines on the VAT Posting Setup page for purchases from EU countries/regions, you can also use these lines for sales.

• Assign the VAT business posting groups in the VAT Bus. Posting Group field on the Invoicing FastTab of the customer card of each EU customer. You should also enter the customer's VAT registration number in the VAT Registration No. field on the Foreign Trade FastTab.

When you post a sale to a customer in another EU country/region, Business Central calculates the VAT amount and creates a VAT entry based on information about the reverse charge VAT and the VAT base. This amount is used to calculate the VAT amount. No entries are posted to the VAT accounts in the general ledger.

If you want to use combination of VAT business posting group and VAT product posting group for reporting as services in the periodic VAT reports, mark the EU Service field.

Example of linking posting groups

Here's a scenario.

These posting groups are chosen on the customer card:

• General business posting group

• Customer posting group

These posting groups are chosen on the item card:

• General product posting group

• Inventory posting group

When you create a sales document, the sales header uses the customer card information, and the sales lines use the item card information.

• The revenue posting (income statement) is determined by the combination of the general business posting group and the general product posting group.

• The accounts receivable posting (balance sheet) is determined by the customer posting group.

• The inventory posting (balance sheet) is determined by the inventory posting group.

• The cost of goods sold posting (income statement) is determined by the combination of general business posting group and general product posting group.

Your setup determines when posting happens. For example, the timing is affected by when you do periodic activities, such as posting inventory cost or adjusting cost item entries.

Copy posting setup lines

The more product and business posting groups you have, the more lines you'll have on the General Posting Setup page. While there might be many different combinations of business and product posting groups, different combinations might still post to the same general ledger accounts. To limit the amount of manual entry, copy the general ledger accounts from an existing line on the General Posting Setup page.

Set up posting groups on the go

To get users started faster, Business Central can show notifications of missing G/L accounts in various posting group setups. To get these notifications, make sure that the G/L Account is missing in posting group or setup notification is selected in the My Notifications page, which you can access from the Change when I receive notifications field in the My Settings page.

This way, when you work on a document that uses a posting group or a setup that is missing a required general ledger account, you get a notification. Choose the link in the notification to open a page where you can make the relevant changes, provided you have permission to do so.

In that case, disable the G/L Account is missing in posting group or setup notification, and then work with your accountant to make the relevant changes to the posting group, setup, or your document. This is an important step, because after documents are posted, you can't delete incorrectly used posting groups or setups because general ledger entries are created for them.

Use the Blocked field in the General Posting Setup page to prevent users from mistakenly using a setup that is no longer relevant for new postings.

Access all fields and accounts when you set up a posting group

Posting groups can be complex to set up. Because some types of accounts aren't frequently used, Business Central doesn't show them as columns on the lines. Also, to make it a bit easier to choose the right accounts, Business Central filters the accounts that you can choose in field lookups.

If you want to access all accounts on the lines and in the field lookups, there are a couple of settings that can help:

• To show all accounts as columns on the lines, turn on the Show All Accounts toggle.

• On individual lines, to access all accounts in the field lookups, choose the View All Accounts on Lookup checkbox.

Troubleshooting posting group errors

Posting groups are one of the more advanced concepts to set up in Business Central. If they aren't set up correctly, errors can occur when posting documents or journal lines. For example, these errors are typically caused by a mistake in how general ledger accounts are assigned, or how posting groups are combined.

When something is wrong, Business Central will display the Error Messages page. The Error Messages page can make it easier to identify and resolve the issue. The page offers a description of the error that points out the posting group setup that needs attention. For example, the message might read "Sales Prepayment account is missing a General Posting Setup." There's also a link to open the page that's the source of the issue, so you can quickly resolve it.