Accounting rules teach how to translate everything that happens in a company to an accounting language, that is, debits and credits.
Dynamics NAV has implemented these rules using posting groups, so the system can translate everything to the accounting language and post it to general ledger entries on the fly.
Posting groups are related to master data. When you create a new record in the master data (for instance, you create a new customer), you need to specify which posting group it belongs to.
In the previous image, you can see the existing posting groups for customers. For each posting group, all the columns are filled with an account value. Dynamics NAV uses these accounts to post the general ledger entries anytime a transaction is made with a customer.
You can create as many posting groups as the amount of detailed information you need. In Europe, for example, you have to separate domestic customers, customers from the European Union, and foreign customers. This is why three customer posting groups exist on the CRONUS demo company.
The following posting groups exist, and each master data is related to at least one of these:
- Customer Posting Group
- Vendor Posting Group
- Job Posting Group
- General Posting Setup
- Bank Account Posting Group
- VAT (Tax) Posting Setup
- FA Posting Group
- Inventory Posting Setup
- Service Contract Account Group
Every time you post a transaction related to any master data record, general ledger entries will be created. This way accountants only have to bother about transactions that no other area in the company posts.
On some special occasions, the integration with accounting can be disabled. We can find an example of this in the Fixed Assets module. If the integration is disabled, it is the user's responsibility to ensure that the Fixed Assets entries are consistent with the amounts posted on the fixed assets accounts from the charts of accounts.