Chapter 6.  Financial Management Setup

In Dynamics NAV, everything leads to accounting, but as we have seen in the previous chapters, most operations inside the financial management area can be done with a little accountancy knowledge. In this chapter, we will learn the setup options that allow this to happen.

The topics that we will cover in this chapter are as follows:

• Posting groups

• Dimensions

• Number series

• The general setup

Understanding posting groups

Posting groups are the linking bridge between the G/L accounts and the accounts used on all application areas, such as items, customers, vendors, and fixed assets. Posting groups are used to notify the system which accounts to use on each transaction. There are three main types of posting group as follows:

• Specific posting groups: These are used to link subsidiary ledgers (namely the vendor ledger entries) to the general ledger. They are used to specify balance sheet accounts.

• General posting groups: Typically, these are used to specify income statement accounts that should be used on transactions. They are used to specify to whom and what we sell or buy.

• TAX posting groups: You use these to specify the tax rates, calculation types, and accounts.

Specific posting groups

Specific posting groups are mainly used to instruct the system about which balance sheet account to use for each subsidiary ledger. For example, the sum of balances of all customers must be equal...

Setting up dimensions

In Chapter 4, Reporting and Business Intelligence, you learned about dimensions and how they can help to analyze the data registered into the system. To create dimensions and dimensions values, we perform the following steps:

1. Navigate to Administration | Dimensions and click on New.

2. Give the new dimension a code such as ITEM TYPE.

3. Click on Dimension Values and create the values shown in the following screenshot:

   

   Note

   You can create new dimension values on existing dimensions at any time.

Once the dimension is created, we have to tell the system whether it will be used as a global dimension or a shortcut dimension. This can be done in the General Ledger Setup window.

1. Navigate to Departments | Financial Management | Setup | General Ledger Setup.

2. In the Dimensions tab, select the ITEM TYPE dimension in the Shortcut Dimension 7 code field.

   Tip

   Change global dimensions Once the global dimensions are assigned, you can change them using the Change Global Dimensions job found on the...

Number series

In Dynamics NAV, every document, transaction, or card (such as a customer or vendor card) must have a unique identification number by which it can be organized and tracked. To let the system help you with this, you can set up a number series performing the following steps:

1. Navigate to Administration | Number Series.

2. Click on New. Give the new number series a code, such as MY CUST, and a description, such as My Customers.

3. Check the Default Nos. field and the Manual Nos. field. This way, you can either use automatic or manual numbering with the number series.

   Note

   If you need to check whether numbers are assigned chronologically, check the Date Order field.

4. Click on the Lines option from the ribbon bar and create the following line:

   

   Note

   If you need to use a new number every month or every year, create as many lines as needed, indicating the starting date on each of them.

5. To instruct the system to use these new number series when creating new customers, navigate to Departments | Financial...

General setup

Every Dynamics NAV functional area has its own setup options that will determine the behavior of the application on that area. We will take a look at the setup of the functional areas we have seen in this book: General ledger, Sales, Purchases, and Inventory.

Most of the available setup options can be found via the following path: Departments | Administration | Application Setup | Financial Management | Finance, and you can choose among the different setups available.

The General Ledger Setup page is shown in the following screenshot:

The General Ledger Setup page allows you to determine general behaviors that will be used throughout the whole application. As an example, we have identified four setup groups, as follows:

• Allowed posting dates: We have explained the usage of this setup in Chapter 3, Accounting Processes.

• Address format: Different countries type address information in different orders. Here, you specify how addresses will be written on printed documents, such as...

Summary

In this chapter, we saw what posting groups are and how they are used in the application to post multiple accounting transactions with no accounting knowledge needed. We have also seen other important setups such as the dimensions or the number series. All these configurations are vital for the application to work the way we want.

In the next chapter, we will see brief explanations of other areas that can be managed in Dynamics NAV regarding financial management.