General Product posting group

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Posted on by Sneha Mani

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Dear Members,

I have requirement to create & setup General product posting group for Item which has both inventory & Non inventory. I have configured the posting setup as follows for a Inventory item:

Purchase account - 100(system based purchase account)
COGS - 200 (COGS account)
Inventory adjustment - 200(COGS account)
Direct cost - 300 (system based direct cost account)

when I post a Invoice for a Inventory item the entry would be as follows which is correct:
Purchase account - Debit
AP - credit
Direct cost - Credit
Inventory - Debit

But when I post a Non-Inventory Item the entry is posting as
Purchase account- Debit
AP - Credit which is wrong

The entry should be as

Expense account - Debit
AP - credit

For Example I have a product posting group named "DEFAULT" which has both inventory & Non Inventory Items. How to configure the product posting group for this?Please help me on this.

Thanks in advance,
sneha

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Dynamics 365 Business Central

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Holly Huffman 6,530 Super User 2025 Season 2 on at

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Good morning, afternoon, or evening depending on your location :)
Hope you are well today!

To address your issue in Microsoft Dynamics 365 Business Central, the key lies in differentiating the posting setup for inventory and non-inventory items, even if they share the same General Product Posting Group like "DEFAULT".
Problem Summary:

Inventory items are posting correctly with COGS and Inventory accounts.

Non-inventory items are incorrectly posting to the Purchase Account instead of an Expense Account.

Both item types are using the same General Product Posting Group.

Root Cause:
In Business Central, the General Product Posting Group and General Business Posting Group combination determines the General Posting Setup, which maps to the Purchase Account.
However, non-inventory items (like services or consumables) should not hit inventory or COGS accounts. They should go directly to an Expense Account.

Recommended Solution:
1. Create a Separate General Product Posting Group for Non-Inventory Items

Example: Create a new group called "NONINV".

2. Update General Posting Setup
Go to General Posting Setup and configure the following:

Gen. Bus. Posting Group Gen. Prod. Posting Group Purchase Account

DOMESTIC DEFAULT 100 (Inventory Purchase)

DOMESTIC NONINV 400 (Expense Account)

Replace DOMESTIC with your actual General Business Posting Group.
3. Assign the Correct Posting Group to Items

Assign "DEFAULT" to inventory items.

Assign "NONINV" to non-inventory items.

4. Verify Item Type
Ensure that the Item Type for non-inventory items is set to Non-Inventory or Service, depending on your version.

Expected Posting Entries After Fix:
For Inventory Item:

Purchase Account – Debit

AP – Credit

Direct Cost Applied – Credit

Inventory – Debit

For Non-Inventory Item:

Expense Account (e.g., 400) – Debit

AP – Credit

Note: I collaborated with AI to help craft this response for clarity and completeness.
Hope this helps some!

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RockwithNav 8,600 Super User 2025 Season 2 on at

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Agree with what @Holly suggested. Small conceptual difference. Have a look on this

https://community.dynamics.com/forums/thread/details/?threadid=b88718b8-5f0d-45af-a1f7-1ff91cc30a8a

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YUN ZHU 95,329 Super User 2025 Season 2 on at

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Hi, hope the following helps as well.

Set up posting groups

https://learn.microsoft.com/en-us/dynamics365/business-central/finance-posting-groups?wt.mc_id=DX-MVP-5004336

Thanks

ZHU

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Andrés Arias 4,188 Super User 2025 Season 2 on at

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Hello,

The following links may help you to resolve:

https://learn.microsoft.com/en-us/dynamics365/business-central/finance-posting-groups

https://usedynamics.com/business-central/finance/product-posting-groups/

https://www.youtube.com/watch?v=qnhYf6s4pak

I hope I can help.

Regards,

Andres

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Mansi Soni 8,907 Super User 2025 Season 2 on at

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Hello,

To handle both inventory and non-inventory items correctly, you should not use the same General Product Posting Group (e.g., DEFAULT) for both item types. Instead, create a separate General Product Posting Group (e.g., NONINVENTORY) for non-inventory items. In the General Posting Setup, map this group to an Expense account (e.g., Office Supplies or Services) instead of the Purchase and COGS accounts used for inventory. Assign the NONINVENTORY posting group to all non-inventory items. This ensures that when you post a purchase invoice for a non-inventory item, the system correctly posts: Expense Account – Debit and Accounts Payable – Credit, avoiding incorrect entries related to inventory valuation.

Hope this answer will help you as well!

Regards,
Mansi Soni

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Gerardo Rentería Ga... 25,157 Most Valuable Professional on at

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Hi, good day
I hope this can help you, and give you some hints.

Using of Posting Groups – Table of Content | Totovic Dynamics 365 Blog

Best Regards
Gerardo

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PRao 394 on at

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Hi,

Create a Separate General Product Posting Group for Non-Inventory Items or service item to get correct entry.
I am agree with details explanation with Holly Huffman written in details with steps.

Thanks,

PR

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Jainam M. Kothari 15,631 Super User 2025 Season 2 on at

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Hello,

You should not use the same posting group for both types.

Instead, create separate General Product Posting Groups—one for inventory items (e.g., "INVENTORY") and another for non-inventory items (e.g., "NONINVENTORY"). For the non-inventory group, configure the Purchase Account to point to an Expense Account instead of an inventory-related account.

Then, assign the appropriate posting group to each item based on its type.

This ensures that when you post a purchase invoice, inventory items follow the correct inventory accounting flow, while non-inventory items post directly to expense accounts as expected.

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Sohail Ahmed 11,136 Super User 2025 Season 2 on at

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Hi Sneha,

In Business Central, it’s recommended to separate inventory and non-inventory items using different General Product Posting Groups. This is because the system determines the G/L accounts based on the combination of General Business Posting Group and General Product Posting Group.

To fix your issue:

✅ Create two General Product Posting Groups, for example:

INV-GROUP – for inventory items

EXP-GROUP – for non-inventory items (services, charges, etc.)

✅ In General Posting Setup, assign:

An expense account (e.g., 6000) for EXP-GROUP

A purchase account and inventory accounts for INV-GROUP

This way:

Inventory items will post to inventory and COGS correctly

Non-inventory items will post to an expense account directly without hitting inventory

📌 Using a single posting group for both item types causes the incorrect G/L behavior you described.

Mark this as the verified answer if it helps.

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