General Ledger in business central
A general ledger serves as the central record-keeping system for a company’s financial data, maintaining a detailed log of debit and credit transactions validated by a trial balance. It captures every financial transaction throughout the company’s operations and organizes the information necessary to prepare financial statements.
Transaction data is categorized into specific accounts, including assets, liabilities, owners’ equity, revenues, and expenses, ensuring accurate and systematic financial reporting.
Key Takeaways:
- General ledger transactions summarize journal entries recorded in sub-ledger accounts.
- The general ledger is the backbone of a company’s double-entry accounting system.
- It captures all transaction data necessary to prepare the income statement, balance sheet, and other financial reports.
- The trial balance provides a comprehensive list of all general ledger accounts and their balances, aiding in error detection and adjustment review.
The General Ledger plays a pivotal role in financial management and accounting within Microsoft Dynamics 365 Business Central.
Users can update the General Ledger by creating and posting General Journal entries or by utilizing the document-to-journal-to-ledger workflow when posting documents.
The General Ledger maintains the balances of all accounts listed in the Chart of Accounts.
Set up general ledger Dynamics 365 Business Central
The General Ledger Setup page is where default settings for the general ledger is configured. This setup is required for each company created in Microsoft Dynamics 365 Business Central to ensure proper functionality and alignment with financial processes.
General Fast tab setup
General fast tab setup contains basic setup. The primary fields on general fast tab are:
Allow Posting From & Allow Posting To: These fields define the date range within which users can post transactions. Since Business Central does not have a dedicated feature to close specific accounting periods, setting a posting date range ensures that entries cannot be posted outside the defined timeframe.
Local Address Format – Determines how addresses are displayed on printouts, such as City, State. In addition to defining the local address format, you can customize address formats for each country on the Countries/Regions page. When the Require Country/Region Code in Address option is enabled in the General Ledger Setup, the ZIP Code, City, and State fields automatically update based on the selected Country/Region Code.
LCY Code – Specifies the local currency (LCY) that the company works with.
Inv. Rounding Precision: Defines the interval used for rounding invoice amounts in the local currency (LCY). For invoices in foreign currencies, rounding settings can be configured on the Currencies page.
Invoice Rounding Type: Defines the method used to round invoice amounts. This setting determines whether amounts are rounded up or down to the nearest interval specified in the Invoice Rounding Precision field. Selecting “Nearest” ensures amounts are rounded up when digits are 5 or higher and down when digits are lower than 5.
Amount Rounding Precision: Specifies the interval used for rounding amounts in the local currency (LCY). Rounding for foreign currencies can be set on the Currencies page.
Amount Decimal Places: Determines the number of decimal places displayed for amounts in LCY across all transaction types. The default setting is 2:2, ensuring a minimum and maximum of two decimal places. You can also set a fixed value, such as 2, for consistency. Decimal place settings for foreign currencies can be adjusted on the Currencies page.
Unit-Amount Rounding Precision: Defines the interval for rounding unit amounts, such as item or resource prices, in LCY. For foreign currencies, unit amount rounding can be configured on the Currencies page.
Unit-Amount Decimal Places: Specifies the number of decimal places displayed for unit amounts, including item and resource prices, in LCY. Decimal places for foreign currencies can also be adjusted on the Currencies page.
Local Currency Symbol: Sets the symbol for the local currency, such as the dollar sign ($) for USD, which appears on checks and charts.
Local Currency Description: Provides a descriptive label for the local currency.
Tax/VAT Rounding Type: Determines how tax/VAT is rounded when calculated in LCY. For amounts that include tax/VAT, the system first calculates and rounds the amount excluding tax/VAT using the Amount Rounding Precision, then subtracts the tax/VAT amount. The tax/VAT rounding type does not apply in this case.
Bank Account Nos.: Specifies the number series used to assign unique codes to bank accounts.
Bank Reconciliation Adjustment Document Numbers: Defines the document number series used for bank reconciliation adjustments in the general ledger setup.
Bank Reconciliation with Automatic Matching: Enables automatic matching during bank account reconciliation. If enabled, you’ll use the Payment Reconciliation Journals page, which supports importing bank statement files. If disabled, reconciliation will be done using the Bank Rec. Worksheet page, which is more suited for managing checks and deposits.
Enable Data Check: Determines whether Business Central validates data entered in documents and journals in real time. For documents, enabling this option displays validation messages in the Document Check FactBox. For journals, messages appear in the Journal Check FactBox. Additional details about this feature are provided in later sections of the module.
Dimensions Fast Tab
On the Dimensions FastTab, you can configure global and shortcut dimensions. The two global dimensions, typically representing key company metrics, are often used in analysis reports. To set them up, navigate to General and select Change Global Dimensions.
The first two shortcut dimensions are always the global dimensions by default. Additionally, you can add shortcut dimensions to journals and document lines to streamline the entry of dimension values. Beyond the default global dimensions, you can select up to six additional shortcut dimensions for more flexibility.
Background Posting Fast Tab
On the Background Posting FastTab, you can enable background posting for general ledger documents. With job queue entries, you can also schedule general ledger postings to run automatically.
- Post with Job Queue: Indicates whether job queues are used to post general ledger documents in the background.
- Post & Print with Job Queue: Specifies whether job queues are used to post and print general ledger documents in the background.
- Job Queue Category: Defines the category code for the job queue associated with background posting. This code is assigned to the job queue entry used for posting general ledger documents.
- Notify on Success: Determines whether a notification is sent upon successful completion of posting and printing.
- Report Output Type: Sets the format of the report generated when the Post and Print with Job Queue option is enabled and scheduled through a job queue entry.
Reporting Fast tab
The Reporting FastTab allows you to specify whether an additional reporting currency is used. An additional reporting currency is useful when transaction data needs to be available in a currency other than the local currency.
When configured, users can generate financial reports in both the local currency and the additional reporting currency.
You can also define account schedules for the following reports:
- Balance Sheet
- Income Statement
- Cash Flow Statement
- Retained Earnings Report
To create these account schedules, follow these steps:
- Click the Search icon in the upper-right corner, enter G/L account categories, and select the related link.
- Go to Process > Generate Account Schedules.
These account schedules are generated based on the G/L account categories and subcategories. Ensure that all G/L accounts have accurate categories and subcategories before generating the schedules.
Application Fast tab setup
The fields on the Application FastTab allow you to configure the following settings:
- Currency rounding tolerance.
- How payments, including customer and vendor payments, are applied to outstanding amounts.
The Application FastTab includes the following:
- Application Rounding Precision: Defines the interval size used for rounding differences in the local currency (LCY). This setting is applied when LCY entries are matched with entries in a different currency.
- Payment Discount Tolerance Settings:
- Payment Disc. Tolerance Warning, Payment Disc. Tolerance Posting, and Payment Discount Grace Period: Configure these fields to allow tolerances for payment discount terms.
- Payment Tolerance Settings:
- Payment Tolerance Warning and Payment Tolerance Posting: Use these fields to settle outstanding receivables and payables where payment amounts differ slightly from the amount owed.
- Payment Tolerance %: Specify the allowable percentage difference between the payment or refund and the invoice or credit memo amount.
- Max. Payment Tolerance Amount: Set the maximum absolute amount by which the payment or refund can differ from the invoice or credit memo amount.
To modify the payment tolerance, follow these steps:
- Open the General Ledger Setup page and navigate to Actions > Functions > Change Payment Tolerance.
- Check the All Currencies box if you want to apply the same payment tolerance settings to both local and foreign currencies.
- Leave the Currency Code field blank to configure payment tolerances for the local currency. Tolerances for foreign currencies can be set up separately on the Currency Card page.
- Enter the desired percentage in the Payment Tolerance % field.
- Specify the maximum allowable amount in the Max. Payment Tolerance field.
- Click OK to execute the Change Payment Tolerance batch job.
General Ledger User Manual
General Ledger
Open new Ledger/GL in Chart of Account
Path:
→ Choose an icon or else press alt+Q, enter Chart of Account, and then choose the related link.
→ It will Open List page
→ Click on New Button.
→ It will Open blank G/L Account Card:
General Fast Tab:
No.: No will be entered Manually. User must identify where New ledger needs to be opened. Accordingly, the No. will be entered.
Name: Name of the General Ledger Account.
Income/Balance: Select here whether the General Ledger is an Income statement account or Balance Sheet Account.
Account Category: Select Account Category from the drop-down list.
Account Sub-category: Select Account Sub-Category from the drop-down list.
Account Type: Select Posting.
Posting Fast Tab
Gen Posting Type: Select value if ledger is related to Purchase/Sale Transaction. Leave it Blank if it’s Balance sheet account.
Gen Prod. Posting Group: Select GENERAL from drop down list.
VAT Prod. Posting Group: Select VAT Prod. Posting group from Drop down list.
Press ESC button to come back to Chart of Account List Page.
Indent Chart of Account:
→ Chart of account needs to be Indented when you open a new Ledger/ Chart of account. To indent click on Home → Indent Chart of Account.
→ It will open a new Dialogue Box.
→ Click Yes to Validate it. This function will Validate chart of account.
The General Ledger in Business Central is the foundation of financial management, offering tools to manage accounts, track transactions, and generate accurate financial reports. With features like global and shortcut dimensions, background posting, and multi-currency support, it simplifies complex accounting processes. Businesses can configure the General Ledger to fit their unique needs, ensuring accurate data and compliance while enabling real-time insights into financial performance.
If you have any questions, need more information, or would like to discuss your requirements, feel free to reach out to us. We’re here to help!
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