Posting groups explained

Posting groups determine which general ledger accounts a transaction ends up on. When they are set up correctly, Business Central posts to the right accounts by itself. When they are wrong, you get error messages or postings on the wrong account. Here are the three main types, how they combine, and what to check when something goes wrong. It makes it easier to talk to the accounting department about the setup.

The general posting groups

Microsoft divides posting groups into general, specific and VAT-related. The general ones consist of two groups that are combined:

Think about what the reports should show before you create groups. If sales must be split between customers at home, in the EU and for export, that gives three business groups. If revenue must be split between goods, services and freight, that gives product groups.

Gen. Business Posting Groups are assigned to customers and vendors and tell who you sell to and buy from.
Gen. Product Posting Groups are assigned to items and resources and tell what you sell and buy.

The setup table

The combination of the two groups is chosen on the General Posting Setup page. For each combination you specify the general ledger accounts to be used, for example for sales and cost of goods sold. The same item can thus be posted to different accounts if the customers have different business groups.

The more groups, the more lines. You can copy accounts from an existing line, and the Blocked field prevents an outdated combination from being used on new postings.

Plan the groups from the reports you want. Every new group creates more lines to maintain, so only split where the accounts need a separate figure.

The specific groups

Specific groups belong to one type of data. Customer posting groups and vendor posting groups determine receivables and payables accounts. Inventory posting groups determine inventory accounts per combination with location. Bank account posting groups link bank accounts to general ledger accounts. FA Posting Groups determine accounts for acquisition, depreciation, gains and losses.

Microsoft recommends that the general ledger account on a bank account does not allow direct posting.

The posting groups thus determine which figures go on which line of the income statement. That is why the accounting department should approve changes, not the individual user.

An example from Learn

The customer has a Gen. Business Posting Group and a customer posting group. The item has a Gen. Product Posting Group and an inventory posting group. On a sales order, the combination of the business and product groups determines the revenue and cost of goods sold accounts. The customer group determines the receivable, and the inventory posting group determines the inventory account.

When posting happens depends on the setup, for example on when you post inventory costs to the general ledger.

Try following a sales invoice account by account before you go live. Use the posting preview and check that every line ends up on the account you expect.

VAT and alternative groups

VAT groups follow the same principle: business group and product group are combined in the VAT setup, which gives the rate and accounts. It is a separate set of groups. Read more in the article on VAT settlement.

You can allow alternative customer, vendor and employee posting groups by turning on Allow Multiple Posting Groups in the sales, purchases and human resources setup and on the card. Then the user can choose a different group on the document.

If you add new countries or item types, the new combinations must be set up before the first posting. Make it a fixed step whenever new customer or item groups are created.

Troubleshooting and checks

If an account is missing, Business Central shows the Error Messages page with a description and a link to the setup that is missing. Use the link instead of guessing. You can also get a message about missing accounts, but Learn warns that the system can create placeholders in the setup. If that is not allowed in your company, turn the message off and work together with the accounting department.

After posting, you cannot delete groups or setups that have been used. Use the change log to see who has changed the posting groups and when.