Now that you have migrated to Microsoft Business Central, let’s take a look at some basics in getting started in managing your finances. At the start, before the chart of accounts and posting groups can be set up, there are some decisions that must be made about what types of transactions will take place in each group and which account should hold them. This way it’s easier for finance processes such as assigning default general ledger postings by customer or vendor name because all information pertaining to these items would fall under one category within an account type with uniformity among different departments so everything remains streamlined.
Finance can be a painful process, but it doesn’t have to feel like that. With many of the setup tasks being automated and assisted by some cleverly written guides hosted on Microsoft’s website, The goal in getting up and going is easy as ever. To start, you can add dimensions for different types of information to every transaction. For company dimensions, projects or departments can be declared. There’s no reason you should ever have an issue with your finances again with the power to organize your data in how it makes sense to your entire organization.
When it comes to setting up your accounting system, you’ll need a lot of time and patience. There are many different features that can be adjusted at any point in the future – while some settings must only be completed once before entering transactions, others will have to re-done periodically. The most important thing is not getting overwhelmed!
Configuring Your Payment Methods
You can assign a payment method to customers and vendors so that the same method is always used on your sales or purchase documents. If needed, you can change it right there in the document for an individual sale or purchase. Keep in mind, this will not change the default payment method assigned to the vendor.
The same payment methods are used for sales and purchase documents. For example, a cash payment method is used both when you make payments and when you receive them. Business Central knows that creating either kind of invoice, whether it’s a sale or purchase, the type of document will dictate what settings need to be entered in order for everything on your transaction sheet(s) come together properly with each other’s information.
The same types of transactions can take place between businesses such as buying products from one company where they acquire by paying cold hard cash upfront; but if another business wants to do something like rent an office space instead then they might use some variation on deferred revenue accounting under which future revenues would not accrue until actually received at a later date.
Setting Up Payment Terms
Payment terms are the backbone of your business’s finances. They determine how you manage due dates and payment discounts, but more than that they dictate whether or not a customer will come back to do business with you in the future. When deciding which type of policy is best for your company, think about what would be most beneficial: Someone who pays late or someone who does not pay at all? The options vary from month-to-month contract agreements to one time payments on debit cards; whatever it takes we can work together so that our customers’ needs are met!
You can assign payment terms to customers and vendors so that the same terms are always used on the sales and purchase documents you create for them. If needed, you can change it up by changing your payment term of choice on a document-by-document basis within 14 days or 7 days from when they were created respectively (unless otherwise specified). This does not alter their assigned default status with regards to how much time is allotted before due date in which case said customer’s payments will be automatically deducted once expired without any manual intervention whatsoever!
You’ll also never have to worry about calculating your payment discounts again. Business Central handles all of the calculation for you, so that’s an easy task off your plate!
Credit memos work in a similar way to payment discounts on invoices. If there is an existing credit memo applied when you post payments, the possible discount for that invoice will be reduced by the payment discount amount for the credit memo.
Configuring Posting Groups
Posting groups are a great tool for consolidating and centralizing information in your company. They help you to save time by not having to post each transaction individually, reduce errors because the posting group is set up specifically with certain account values that will be posted automatically when transactions happen within it, and can provide insight into potential problems or areas of improvement if there happens to be any discrepancies between what’s expected versus actual data.
There are 3 categories of posting groups
General: The first posting group defines who you sell to and buy from, as well as what you sell and what you buy. You can also combine groups to specify things like the income statement accounts that should be posted or whether reports are filtered by a particular account category.
General Business Posting Groups
You can use company posting groups to group customers and vendors by geographical area, or the type of business.
General Product Posting Groups
Create a set of groups that represent what you sell and buy. Each group is further divided up by type, so it will be easier to track sales in specific areas for inventory purposes.
General Posting Setups
You can post the sale of an item to multiple accounts in your general ledger because customers are assigned different business posting groups. For example, a customer might be part of both “retail” and “wholesale” businesses at once!
Specific: When you sell something, your accountants will make sure that you get the proper credit for it in two places – both with the customer who bought from you and also on a general ledger where all of those sales are tracked.
Customer Posting Groups
When you account for sales to customers, the general business posting group assigned to your customer and the product’s general product posting group determine which accounts receivable transactions are posted.
Vendor Posting Groups
Define where to post transactions for payables accounts, service charge accounts, and payment discount accounts. This is similar to customer posting groups.
Bank Account Posting Groups
Define accounts for bank accounts. For example, this can simplify the processes of tracing transactions and reconciling bank accounts.
Fixed Assets Posting Groups
Define accounts for different types of expenses and costs, such as acquisition costs, accumulated depreciation amounts, acquisition costs on disposal, accumulated depreciation on disposal, gains on disposal, losses on disposal, maintenance expenses, and depreciation expenses.
Inventory Posting Groups
You are given the ability to organize your inventory by posting group for more detailed reports, it will help keep all the related items in one place.
Tax: Calculations in what you’re selling and who is buying, the third posting group defines how much of a tax percentage and calculations coorelates to the transaction.
Tax Business Posting Groups
As you post sales tax for customers and vendors, it is important to think about how many groups there should be. For example, if they are trading domestically as well as internationally then some may need more than one group in order to separate costs properly.
Tax Product Posting Groups
Indicate the tax calculations needed for the types of items or resources you buy or sell.
Tax Posting Setup
Combine tax business posting groups and tax product posting groups. When you fill in a general journal line, purchase line, or sales line, Business Central wil look at the combination to identify the accounts to use.