Using Posting Profiles in D365 Finance and Operations – Benefits Beyond Debits and Credits

A core requirement of any ERP system is the ability to manage postings from subledger transactions into the General Ledger. Reconciliation between the General Ledger and subledgers should be seamless, with every detail posted to control accounts clearly visible for audit and reconciliation purposes. Accountants rely on this level of automation, transparency, and control as a standard expectation in ERP solutions.

In Dynamics 365 Finance and Operations (D365FO), this functionality is delivered through Posting Profiles. While the terminology may vary across different modules, the principle remains consistent: Posting Profiles govern how subledger transactions flow into the General Ledger.

Beyond simply controlling postings, they also offer flexibility in how General Ledger accounts are applied within subledger transactions. This makes Posting Profiles a powerful mechanism for tracing transactions across the General Ledger and ensuring financial integrity. Posting Profiles – Control over posting

Posting Profile setups include interactions with the following subledgers:

• Accounts payable

• Accounts receivable

• Cash and bank

• Inventory

• Production

• Fixed assets

• Project management and accounting

Once these Posting Profiles are in place and validated, they are used to automatically assign the required control accounts on the originating subledger transactions. This provides assurance that the source transaction posts to the correct control GL account.

For example, look at the vendor Posting Profile below. The GL account is set to 200100 under Summary account, which means that all Accounts Payable transactions will default to the account 200100.

When an AP invoice journal is created, the credit to accounts payable will automatically default to account 200100. When a Vendor check is created and posted, the debit will automatically post to the same account.

Users are not able to change this posting at a transaction level. When the transaction type of Vendor is selected during AP Invoice entry, or when creating the AP check, the system automatically pulls the account from this setup. This reduces the amount of differences made to the GL account from users making decisions on a transaction by transaction basis, expedites data entry, and improves accuracy.

This also means that when reconciling the Accounts Payable subledger to the General Ledger, the reconciliation will be “right on the money.” I very rarely see subledger balances differ from the General Ledger for this reason–Posting Profile setups control the transaction. In the rare case where the subledger balance differs from the GL balance, the “rogue” transaction stands out in the detail. This functionality is the same across Vendors, Customers, Fixed Assets, Production, Inventory, and Project Accounting. In the example below, we have the Posting Profile for Items (Inventory Management > Posting > Posting).

This Posting Profile is bit a more involved, but it is the same concept. The transaction type, Inventory Issue, is for an inventory adjustment out or a negative inventory adjustment. When an inventory adjustment transaction is created, the General Ledger account for the inventory item cannot be updated at the transaction level; the account pulls from this Posting Profile based on the setup.

This takes the decision-making process out of the hands of the users and reduces the errors and variances when reconciling inventory each month. In the above example, when a negative inventory adjustment is posted, the General Ledger account for the inventory item, inventory group, or all items will pull from this Posting Profile. Flexibility with Posting to GL Accounts

D365FO Posting Profiles also offer the flexibility to record transactions with various levels of detail that are required to have accurate posting. Let’s look at the Customer Posting Profile tab for an example:

Notice that the ledger account specified can be set on the Customer Account code for:

• All Customers (All)

• Customer group (Group)

• A specific customer (Table)

In this example, if you were looking to book a different Accounts Receivable account for a specific customer group, you would select the Customer Group and the corresponding Summary GL account for this group. These may be retail customers, foreign customers or maybe a government agency where the requirements for tracking the balances in the General Ledger may dictate separation for financial statement purposes.

When the order is invoiced for a customer within this customer group, the Accounts Receivable invoice balance will automatically be debited to account 106225. In addition, when the payment is received for a customer within this customer group, the AR balance received will be credited to account 106225.

You can also configure Posting Profiles to track control accounts at the individual customer level. For example, if the Accounts Receivable balance needs to be managed as a Note Receivable, the setup can reflect terms where the customer pays the outstanding balance over a year.

To configure this, update the Posting Profile by selecting the account code “Table” and then choosing the specific customer account. In the Summary account field, assign the designated General Ledger account for that customer. There is no restriction on how many customers or customer groups can be defined within a Posting Profile, giving you full flexibility in managing account-level tracking.

The order for the sequence of the Posting Profiles is important. In the example above, the system will look at the specific “Table” Account code first, then the Account code “Group” and finally the catch all Account code “All.”

For inventory postings, notice below that the ledger account specified can be set on the Item code for: All items

• Item group

• Item category

• An individual item

The Item relation in the second column is dependent upon the selection made in the Item code.

The Item code Category is used for purchasing non-inventory procurement categories. This is not used for inventory transactions, but the setup is managed for purchasing, receiving and sales within the item Posting Profile.

Posting Profiles link to Posting Types

When reviewing a transaction voucher, it is important to not only look at the debits, credits, and the ledger account, but to also pay close attention to the posting type that is driving the transactional posting. The posting type identifies the Posting Profile that is used to map the transaction flow to the ledger.

A great tool for tracing transactions is the Accounting source explorer. With the Accounting source explorer, you can select a range of dates to view detailed ledger transactions. From there, you can filter your transactions by the posting type.

Below highlighted, is a posting type Inventory receipt. You can filter all the transactions with this posting type to review the detail behind each transaction. Inventory receipts and Inventory expenditures are defined in the Posting Profile setup.

Posting Profiles are required for updating General Ledger accounts from the subledger to the General Ledger in D365FO. When these are set up and tested properly, they provide tremendous benefit for control, flexibility and tracing across your organization.