In Microsoft Dynamics 365 Business Central (Administration), how do I… Understand Posting Groups

This post is part of the In Microsoft Dynamics 365 Business Central (Administration), how do I… series and of the wider In Microsoft Dynamics 365 Business Central, how do I… series which I am posting as I familiarise myself with Microsoft Dynamics 365 Business Central.

Posting groups are how Dynamics BC determines to which G/L accounts transactions are posted. They work by mapping entities, such as customers, vendors, items, sale documents, purchasing documents and so on, to the G/L accounts in order to save time and reduce errors.

There are three types of posting group in Dynamics BC:

1. General posting groups are used to define how transactions should be posted to the general ledger for a particular customer, vendor, item, or resource. They allow you to specify default accounts for different types of transactions based on the entity being used in the transaction. For example, you might use a General Posting Group to specify the default accounts for sales or purchases for a particular customer or vendor.
2. Specific posting groups which are used to specify how transactions should be posted to the general ledger for a particular item or resource. They allow you to define default accounts for different types of transactions involving a specific item or resource. For example, you might use a Specific Posting Group to specify the default accounts for inventory transactions for a particular item.
3. Tax which are used to specify the VAT (Value Added Tax) posting setup for a customer or vendor. They allow you to define default VAT accounts for different types of transactions involving a particular customer or vendor. For example, you might use a Tax Posting Group to specify the default VAT accounts for sales or purchases for a particular customer or vendor

In the next few articles in this series, I’ll take a deeper look into each of the posting group types.