The Big Picture: NAV General and Specific Posting Groups

In previous posts, we have learned about General and Specific Posting Groups but let’s now put all the info together and view the results in the Ledger for posting with some examples.

Today I will take you through how both the Balance Sheet and the Income Statement (P&L) are affected when posting transactions that involve G/L lines as well as Item lines. We will look at two examples for Domestic customers and Vendors and how the VAT is affected so we can put the whole picture together for both General and Specific Posting Groups.

The first example will be a Sales Invoice posted against a Customer with a Customer Posting Group of Domestic using a G/L Line with setups that allows VAT.

The second example will be a Purchase Invoice against a Vendor with a Vendor Posting Group of Domestic  using two Item lines that specify VAT.  We will post a second Item line to this Purchase Invoice and we will change the VAT % for this line (i.e. The VAT Product Posting Group)

Both examples will be done in the standard NAV 2013 R2 Cronus database so you can practice these for yourself and see the results (and hopefully try a few of your own).

Example 1:

In keeping with my usual form, I am going to pick on the Cannon Group again and use Customer 10000 to post our first Sales Invoice.  The Invoicing Tab for the Cannon Group shows the General and VAT Business Posting Groups to be National.

Customer 10000 Invoicing Tab

We know from looking at the General and VAT Posting Setups that VAT will be posted on these transactions and the relevant Income Statement Accounts will be affected by the Sale or Purchase Transaction as specified in the General Posting Setup.

Gen Posting Setup Retail_Raw Mat

General Posting Setup

VAT Posting Setup National

VAT Posting Setup

I have used G/L Account 8450 for this Sales Invoice.  The Posting Tab on this G/L Account shows a Business Posting Groups of NATIONAL and a VAT Product Posting Group VAT17.

GL 8450 Posting Tab

The Sales Invoice will look like this:

SInv 1006 GL8450

Note that the VAT Product Posting Group of VAT17 has been copied to the Invoice Line from the G/L Card setup.  Go ahead and post your invoice.

When you are done, navigate on the invoice and show the G/L Entries.  You will see there are entries for the G/L Account you posted directly into (8450) as well as a VAT Entry (picked up using the VAT Posting Setup) and a third Balance Sheet Entry (picked up from the Customer Posting Setup) showing the G/L Account specified in the Customer Posting Group under Receivables for the DOMESTIC Customer Posting Group that was specified on the Customer Card for Customer No. 10000.

GL Entries SInv 1006

You will note that the postings to the Income Statement Accounts reflect the information entered into the Sales Invoice (amount Excluding VAT with a 17.5% VAT charge).  The Balance Sheet posting will reflect the TOTAL amount Including VAT on the Receivables Control Account.  This is the same amount that will be posted to the Customer Ledger Entry for this transaction.

Example 2: 

For this example I will be using Vendor no. 50000 – Service Electronics Ltd.  The Invoicing Tab for this Vendor Card shows a VAT Business Posting Group of NATIONAL and a Vendor Posting Group of DOMESTIC

Vendor 50000 Invoicing Tab

If we look at the VAT Posting Setup, we know that the NATIONAL VAT Business Posting Group will allow VAT and the rate of VAT will depend on the VAT Product Posting Group assigned to the entries at the time of posting.

For this invoice I will use Items 1100 and 1120.  Below you can see the different Product Posting Groups as well as the Inventory Posting Groups specified on the Item cards.  It is important to note that even though the VAT Product Posting Group is set to VAT17, this can be changed on the invoice before posting.  We will change VAT17 to VAT5 for Item 1120 before posting the invoice.

Item 1100 Invoicing Tab

Item 1100 Invoicing Tab

Item 1120 Invoicing Tab

Item 1120 Invoicing Tab

Something to note at this stage…

If you look at the Inventory Posting Groups that were specified on the Item Card, you can see that the Inventory Account specified for FINISHED and RAW MAT also show a different G/L Account.  Something to remember now is that we will not see the postings to these Inventory specific G/L Accounts upon posting of  the Purchase Invoice  but only posting of the Adjust Cost Routine.  The accounts that will be affected now will be the G/L Accounts related to the purchase transaction and related VAT and Vendor entries, not the Inventory Entries.  This is also because we have not set up Automatic Cost Posting.  Don’t worry about this level of detail for now.  I will cover it later on when we drill down into the detail for Inventory Costing. 

Inventory Posting Groups

Inventory Posting Groups

 The Purchase Invoice for this example will look like this:

PInv 1002 Items

As you can see, the VAT Product Posting Groups has been changed for the second line to reflect VAT5.  Go ahead and post this invoice and take a look at the G/L Entries posted for this invoice using the Navigate Function in NAV.

GL Entries PInv 1002

You will note that there are five lines.  Two lines for each item showing the posting to the relevant Income Statement G/L Account specified in the General Posting Setup for the Purchasing Account and the VAT Amount posted to the Income Statement G/L Accounts specified in the VAT Posting Setup relevant to the VAT % or VAT Product Posting Group specified on the Invoice line.  

The fifth line showing the Total Amount of the Invoice Including VAT posted to the Balance Sheet G/L Account specified in the Vendor Posting Group for DOMESTIC for Payables Account.  This is also the amount that will post to the Vendor Ledger Entries.

Gen Posting Setup Retail_Raw Mat

General Posting Setup

VAT Posting Setup National

VAT Posting Setup

Vendor Posting Grp Domestic

Vendor Posting Grp Domestic

 Now that you have seen the entries for the posting for Domestic Customers and Vendors, why not try a posting of your own Sales Invoice using a Customer with a General Business Posting Group of EXPORT with a sales line for Item 1100 and see what the result is for the VAT when you post the invoice.  

Good Luck and remember to enjoy trying new things and testing with NAV Posting Setups.

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Posted in NAV 2013, NAV Posting Groups, Navision, Posting Groups, Specific Posting Groups

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