Dynamics NAV Posting Groups

Dynamics NAV Posting Groups

The purpose of posting groups is to provide Dynamics NAV with the rules required to direct postings into the necessary General Ledger Accounts when posting transactions.

General Posting Groups

General Posting Groups are used to direct monies from transactional postings based on the type of Vendor or Customer as well as the Type of Product that the posting relates to. To allow this, NAV provides you with a General Business (Gen. Bus.) Posting Group and a General Product (Gen. Prod.) Posting Group.

If we look at the setup below from the NAV Cronus company we can see that the General Posting Setup contains a variety of different combinations based on the business’ requirements.
For example, we can see that there is a Gen. Bus. Posting Group for EU, Export and Intercompany. This would then be set up on Vendors and Customers within the Invoicing fasttab. The Gen. Bus. Posting Group assigned to a Customer of Vendor defines the type of entity that the Customer/Vendor is. So, in this instance, we can see that the Cronus company wants to direct postings for Customers and Vendors in different locations.

Part of the General Posting Setup would then be to define the different types of Products/Services that the company Purchases or Sells and which G/L Accounts should be used. If using Items the Gen. Prod. Posting Group can be defined on the Price & Posting fasttab.

In this example we can see a Sales Account assigned to the Combination of EU and Raw Material. Therefore, if I create a Sales Order for a Customer that is EU and an Item that is a Raw Material, when I invoice the Order, the Sales Revenue will be posted to account 6220.

If we now look at the G/L Entries created when I post the invoice for the combination of EU and Raw Material we can see that the system has created an entry in the G/L (Account 6220 as per our earlier setup) for the correct combination.

An opposing entry has been created in the Customer Ledger.

In this instance a Line discount of 20% has been applied to the Invoice. This can be seen having been posted to the G/L Account 6910 as per the below setup.

N.B. Because this is an EU transaction a Currency Exchange rate has also been applied, there for the Customer Ledger Entry shows 80, Currency Code EUR and the G/L Entries are displayed in the LCY (Local Currency) of GBP.

VAT Posting Setup

The system also enables the calculation and posting of VAT to specific accounts based on a Business (VAT Bus. Posting Group) and Product (VAT Prod. Posting Group).

This functionality works in a very similar way to the General Posting Setup in that; a combination is used to determine where the value is posted. The VAT Bus. Posting Group is set up on the Invoicing tab of the Customer/Vendor card and within the Price & Posting tab on the Item.

If we take a look at the VAT Posting Setup Card we can see some more detail on the VAT Posting Setup.

On the Card you will specify the percentage of VAT applicable to a Product and Business combination in the VAT % field. This percentage is used in calculations of VAT and so it is important that this is filled in.

It is also possible that VAT will be calculated in different ways dependent on the type of VAT that it is. In the above example we can see that this set up is for an EU business. When selling from the UK to EU, reverse VAT can be applicable. Therefore; the VAT Calculation Type field has been populated as Reverse Charge VAT.

Below is what the Microsoft Dynamics NAV Help has to say about the different calculations available.
Option Description

Normal VATUse this option to have the program calculate VAT for items sold of purchased with this particular combination of business posting group and product posting group.
Reverse Charge VATUse this option when you trade with other countries/regions within the EU where the purchaser must calculate and settle VAT accounts with the tab authorities.


Also remember to fill in the Reverse Chrg. VAT Acc. field (this is populated in our example). Selecting this option has no effect on your company’s financial statements. When you sell goods with reverse charge VAT, you neither calculate nor withhold VAT. When you purchase goods, the program will calculate the VAT amount, debit the purchase VAT account and credit the reverse charge VAT account.

Full VATUse this option when the amount you want to post that has this particular combination of VAT business posting group and VAT production posting group consists entirely of VAT. This option can be useful if, for example, you make a corrective entry in order to correct a VAT calculation error.
Sales TaxThis option is only used if the program must handle UA sales tax instead of VAT.


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Dan Winter

Dan is Support Consultant at Metaphorix

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