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Effect of Purchase Bills

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Posted on by NM-05071110-0

In our BC system, while Booking the Purchase Invoice the G/L Entries goes as follows ;

Inventory Asset A/c Debit
COGS A/c Credit

Vendor A/c Credit
COGS A/c Debit

This result in double booking of Cost which lead to wrong GP.

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Dynamics 365 Business Central

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

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Hello @NM-05071110-0,

The issue you're facing occurs because COGS is being posted at both the time of purchase invoice and expected cost recognition, resulting in double booking of cost and incorrect Gross Profit. This typically happens when automatic cost posting and expected cost posting are both enabled, but the system isn't configured properly for timing and accounts. In standard Business Central, COGS should only be posted at the time of item shipment or sale, not during purchase invoicing. To fix this, review your Inventory Posting Setup, ensure correct General Posting Setup, and verify that inventory cost flow is set up to defer COGS until the item is sold.

If Auto Cost Posting is not enabled, then the entries should be,

Inventory A/c. Dr.

To Direct cost applied A/c. Cr.

Purchase A/c. Dr.

To Payables A/c. Cr.

Hope this answer will help you!

Regards,
Mansi Soni

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Gerardo Rentería Ga... 25,213 Most Valuable Professional on at

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

Posting Groups #2 – Item Sale Posting | Totovic Dynamics 365 Blog

Best Regards
Gerardo

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YUN ZHU 95,331 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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Jainam M. Kothari 15,631 Super User 2025 Season 2 on at

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May this can help : https://learn.microsoft.com/en-us/dynamics365/business-central/finance-how-to-post-inventory-costs-to-the-general-ledger

https://community.dynamics.com/forums/thread/details/?threadid=876011d4-c6a8-42f1-b5d1-f99998a2cfa7

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Jeffrey Bulanadi 8,760 on at

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Hi

This behavior suggests a misconfiguration in your General Posting Setup or Inventory Posting Setup.

In standard BC, COGS (Cost of Goods Sold) should only be posted when items are sold or shipped, not during purchase invoicing.

Here’s what’s likely causing the double COGS entry:

1. Incorrect Account Mapping

The Direct Cost Applied Account or Purchase Account may be incorrectly mapped to your COGS account

This causes BC to post COGS during both purchase and sale, leading to inflated cost and inaccurate gross profit

2. Item Charge or Cost Adjustment Overlap

If you're applying Item Charges during purchase invoicing, and they’re misconfigured, they might post to COGS

Review your Item Charge Assignment and ensure it’s mapped to a clearing or freight account—not COGS

3. Suggested Fixes

Go to Inventory Posting Setup and verify that the Inventory Account and COGS Account are correctly assigned

Check General Posting Setup for the combination of Gen. Bus. Posting Group and Gen. Prod. Posting Group used in the invoice

Use Posting Preview before posting to confirm which accounts will be hit

Here’s a reference for deeper reference.

https://community.dynamics.com/forums/thread/details/?threadid=58bffdcc-8c59-f011-bec1-6045bdec90b9
https://learn.microsoft.com/en-us/dynamics365/business-central/purchasing-how-record-purchases

If you find this helpful, feel free to mark this as the suggested or verified answer.

Cheers
Jeffrey

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