84 - Posting Groups in Dynamics NAV 2017 - Part 6       

Today we are going to keep going on posting groups and this is a turning point we are actually going to move away from the entity posting group and start taking on some of the heavy duty stuff which is the posting setup and general business posting group and general product posting groups, so be prepared to go deep dive, this is actually a super important topic if you understand this you become a star because knowing how posting of costs works inside NAV is not easy and for the faint of heart, but once you get it, everything is much easier to understand.

And there are some nuances which are quirky at first sight, but once you actually take a look at why they are set up like that, you understand why. And things work in that order and why Microsoft has set it up. I’m gonna jump into explaining this.

Chart of accounts
Here we have PowerPoint, this is a slide I’ve been working on before, we have the entity posting groups over here, they are posting to the balance sheet and customers, for example, post their accounts receivable over here, vendor posting group goes with accounts payable, etc.

But never did we talk about how actually the cost post and the revenue post, we are always talking about the balance sheet and the reason for that is of course it’s much simpler, we gotta start somewhere, but if we move into how its go into balance sheet it gets more complicated even though these diagram looks like it's gonna be a little bit simpler. But its elusive, it's gonna be complicated, but not too complicated so you can get it.

The customer posting group, or actually the customers they are assigned a general business posting group as well as the customer posting group. Now the general business posting group is what steer things towards the income statement, and the vendors are actually assigned the same posting group or like from the same set of posting groups, so they also get a general business posting group.

And Microsoft has set it up so that they are basically tying both of these entities together under one posting group, so for example if you have domestic as a general business posting group you can put vendors in the domestic and customers in the domestic.

On the item side, we have something called general product posting group, so you can setup select the general posting group for each one of the sides, and resources share the same posting group as well so they are basically looking at the left-hand side here or actually on the customer and vendor side, the entities are all being put in one posting group as far as posting into the income statement, and I put here as other balance sheets because it does affect the balance sheet, for example when you sell inventory, your inventory goes down and gets moved into cost of goods sold, so you are interacting with the balance sheet and the income statement, it not only the income statement postings.

Likewise, on the items side and resources side, items and resources are just things that you sell or buy. Standard NAV doesn't allow you to buy resources but buys items but in any case, the steering is similar, the steering for posting, so you can sort of see the abstraction that Microsoft is going towards here.

I say Microsoft, obviously, the system was developed in Denmark before Microsoft bought it, so it's the same since all the way back, it's not Microsoft really that made this even though they are maintaining it, this is just good old Danish people that started this whole program.

General Posting set up
If we go into NAV, I can actually go here into posting setup and this is called the general posting setup. If I go in there I get a much bigger screen that I’ve been working with before, and in here we have a combination of a general business posting group; remember those are attached to the entities, so customer or vendor; and a general product posting group and those are attached to what we are selling or buying which is mostly items but could also be resources.

And this is used in other places as well and that combination will tell you where things post. So here we have sales, sales credit, sales line discount, sales invoice, all of that and the accounts are attached to that.

Ok, so that makes perfect sense. Right now we have figured it all out, we know that if the customer is in domestic and we have the items in let say theory or like for example here, domestic and retail, we know that these are the accounts that you get posted to. Right? but you know it’s gonna move between the accounts in a certain fashion, so how does it do that? And if would just live it at this I would only tell you half the story, and in this deep dive videos, we are not going to leave you with half the story.

So we are gonna move forward to actually understand these accounts, now these are a lot of accounts and I’m not gonna go over all of them but I’m gonna go over the critical ones, so here what I’m gonna quickly gonna do is actually choose columns, take a look at the columns over here, you might do the same for this is you are actually going through testing these posting groups and I'm actually gonna take out the ones I don't want to take a look at, so just to reduce the clutter around here, I’m only gonna leave us with let me see, the few accounts and these are the ones.

Now I’m just looking at four accounts those are the four accounts that I’m interested in and that’s how kind of the general flow of the system is, all the other accounts get posted to here and there about you know a certain very specific instances but the general flow of postings flows through these four actions. So these accounts are sales accounts, the sales that we are posting towards, purchase accounts; and you might think what is a purchase account?

I’m gonna explain that to you; the cost of goods sold account obviously and then direct cost applied account, that has a fancy name; then again you might be going what does that mean?; but these are the main accounts that I will be looking at an for the next video we are gonna see how that actually posts through. So stay tuned.