Accounting and bookkeeping
Accounting is a critical function in any enterprise resource planning (ERP) solution, and also in most businesses. Accounting represents the process of recording and cataloging a company's financial transactions, and then retrieving, measuring, summarizing, and presenting the results by using different reports that are often required by local legislation. The primary goal of this process is to help the company's management understand the financials of the business and measure the results of the company's economic activities.
Bookkeeping is one part of the accounting process and involves regularly recording all financial transactions in a company. Business Central is an ERP system that includes integrated tools to make bookkeeping easier in the system. Many actions can be done automatically.
This article provides an outline of bookkeeping processes, including the rules, procedures, and other guidelines in Business Central. The content of this article is intended to help accountants and bookkeepers complete their daily work in this ERP system. For additional help, a context-based assistant is incorporated into Business Central. This assistant contains links to information that's related to the current page and instructions for working with the relevant process. To access it, select the Help button in the upper-right corner to open the Help pane. Then use the links in the About this task or page and Related resources from Microsoft Learn sections.
The following video introduces some of the key capabilities for accounting and bookkeeping.
The following table describes a sequence of tasks and provides links to the articles that cover them.
| Task | Article |
|---|---|
| View or edit the general ledger accounts that all general ledger entries are posted to. | Set Up or Change the Chart of Accounts |
| Specify how your customers will pay you, and how you'll pay your vendors. | Set Up Payment Methods |
| Specify payment terms to manage due dates and calculate possible payment discounts. | Set Up Payment Terms |
| Specify the posting groups that map entities (such as customers, vendors, items, resources, and sales and purchase documents) to general ledger accounts. | Set Up Posting Groups |
| Create financial reports, and define account categories that determine the contents of financial charts and reports, such as the Balance sheet and Income statement reports. | Prepare Financial Reporting with Financial Data and Account Categories |
| Set up the tolerance that the system uses to close an invoice even if the payment, including any discount, doesn't fully cover the amount on the invoice. | Work with Payment Tolerances and Payment Discount Tolerances |
| Set up fiscal periods. | Work with Accounting Periods and Fiscal Years |
| Set up invoice terms that remind your customers to make payments. | Set Up Reminder Terms and Levels |
| Define how you report value-added tax (VAT) amounts that are collected for sales to the tax authorities. | Set Up Value-Added Tax (VAT) |
| Determine how you'll handle unrealized VAT in connection with cash-based accounting methods. | Set Up Unrealized VAT for Cash-Based Accounting |
| Define the foreign currencies that you trade in or report transactions in. | Set Up Currencies |
| Set up your sales and purchasing features to handle payments in foreign currencies. | Enable Application of Ledger Entries in Different Currencies |
| Define one or more additional currencies, so that amounts are automatically reported in the local currency (LCY) and an additional reporting currency on each general ledger entry and on other entries. | Set Up an Additional Reporting Currency |
| Periodically adjust additional currency equivalents to compensate for fluctuating exchange rates. | Update Currency Exchange Rates |
| Define multiple interest rates for different periods that are related to delayed payments in trade transactions. | Set Up Multiple Interest Rates |
| Arrange for amounts to be automatically rounded as invoices are created. | Set Up Invoice Rounding |
| Add new accounts to the existing chart of accounts (COA). | Setting Up the Chart of Accounts |
| Set up business intelligence (BI) charts to analyze cash flow. | Setting Up Cash Flow Analysis |
| Enable customers who aren't set up in the system to be invoiced. | Set Up Cash Customers |
| Set up Intrastat reporting, and submit the report to an authority. | Set Up and Report Intrastat |
| Ensure that a journal entry is allocated between different accounts, such as quantity, percentage, or amount, when you post it to the journal. | Use Allocation Keys in General Journals |
| Set up source codes and reason codes to track audit trails. | Setting Up Source Codes and Reason Codes for Audit Trails |
| Specify the default reports that are used for different document types. | Report Selection in Business Central |
| Apply incoming payments, reconcile bank accounts during payment application, and collect outstanding balances. | Managing Receivables |
| Make payments, apply outgoing payments, and work with checks. | Managing Payables |
| Ask your customers to submit payment before you ship to them, or submit payment to your vendors before they ship to you. | Invoicing Prepayments |
| Reconcile and transfer funds between bank accounts. | Reconciling Bank Accounts |
| Set up intercompany partners, and automatically or manually process transactions between legal entities in the same company. | Managing Intercompany Transactions |
| Analyze the costs of running your business by allocating actual and budgeted costs of operations, departments, products, and projects to cost centers. | Accounting for Costs |
| Manage inventory and manufacturing costs, and report and reconcile costs with the general ledger. | Managing Inventory Costs |
| Manage and report cash inflows and outflows. | Cash Flow Overview |
| Monitor the flow of cash into and out of your business. | Analyzing Cash Flows in Your Company |
| Follow an end-to-end process that uses financial reports to make cash flow forecasts. | Making Cash Flow Forecasts by Using Financial Reports |
| Learn about the general ledger and the COA. | Understanding the General Ledger and the COA |
| Combine general ledger entries from multiple companies in one virtual consolidated company for financial analysis. | Consolidating Financial Data from Multiple Companies |
| Add dimensions for richer BI. | Work with Dimensions |
| Create general ledger budgets to forecast different financial activities, and assign dimensions for BI purposes. | Create G/L Budgets |
| Record income and expenses directly in the general ledger without posting dedicated business documents. | Post Transactions Directly to the General Ledger |
| Reverse entries to undo value postings in the general journal or quantity postings on purchase and sales documents. | Reverse Journal Postings and Undo Receipts/Shipments |
| Allocate an entry in a general journal to several different accounts when you post the journal. | Allocate Costs and Income |
| Assign extra costs, such as freight and physical handling expenses that you incur during trade, to the items that are involved. The cost is then reflected in inventory valuation. | Use Item Charges to Account for Additional Trade Costs |
| Post employee expenses for work-related activities, and make reimbursements directly to employee bank accounts. | Record and Reimburse Employees' Expenses |
| Allocate revenue and expenses to periods that differ from the periods when the transactions were actually posted. | Defer Revenues and Expenses |
| Learn about the available options for automatically sending subscription invoices to customers and for registering recurring revenue. | Work with Recurring Revenue |
| Use additional currencies, and automatically update currency exchange rates. | Update Currency Exchange Rates |
| Import salary transactions from your payroll provider into the general ledger. | Import Payroll Transactions |
| Calculate VAT on sales and purchase transactions, so that you can report the amounts to the tax authorities. | Work with VAT on Sales and Purchases |
| Prepare a report that lists VAT from sales, and submit the report to tax authorities in the European Union (EU). | Report VAT to Tax Authorities |
| Manually convert service contracts to change their VAT rate. | Convert Service Contracts that Include VAT Amounts |
| Work with financial statements and overviews in Microsoft Excel. | Analyzing Financial Statements in Excel |
| Use the Accountant Role Center, engage an external accountant, and use the Company Hub to manage the accounts of multiple clients. | Accountant Experiences in Business Central |
| Set up Intrastat reporting to provide trade with other EU members according to local legislation. | Set Up Intrastat Reporting |
| Fill in, validate, and submit the Intrastat report. | Work with Intrastat Reporting |
| Set up, fill in, validate, and submit the service declaration report for trading services across the EU. | Set up and using the Service Declaration |
| Create fixed assets, assign depreciation methods, post acquisitions, salvage values, and print fixed asset lists. | Acquire Fixed Assets |
| Record service visits, post maintenance costs, and monitor maintenance costs. | Maintain Fixed Assets |
| Update insurance information, post acquisition costs to insurance policies, modify insurance coverage, view insurance statistics, and list insurance policies. | Insure Fixed Assets |
| Reclassify fixed assets, transfer fixed assets to different locations, and split up or combine assets. | Transfer, Split, or Combine Fixed Assets |
| Adjust the value of fixed assets, post appreciation, and post write-down transactions. | Revalue Fixed Assets |
| Calculate and post depreciation, and analyze depreciation on fixed assets reports. | Depreciate or Amortize Fixed Assets |
| Post disposal transactions, view disposal ledger entries, and post partial disposals. | Dispose of or Retire Fixed Assets |
| Manage fixed asset budgets, budget acquisition costs, budget disposals of fixed assets, and budget depreciation. | Manage Budgets for Fixed Assets |
| Set up approval workflow users, specify how users are notified, and create new workflows. To create new workflows for unsupported scenarios, implement the required workflow elements by customizing the application code. | Set Up Approval Workflows |
| Enable approval workflows, act on workflow notifications (for example, by requesting and approving a workflow step), and archive and delete workflows. | Use Approval Workflows |
| View actual amounts compared to budgeted amounts for all accounts and for several periods. | Analyze Actual Amounts Versus Budgeted Amounts |
| Create new financial reports to define financial statements for reporting or to display as charts. | Prepare Financial Reports with Financial Data and Account Categories |
| Analyze your financial performance by setting up key performance indicators (KPIs) based on financial reports, and publish the KPIs as web services. The published financial report KPIs can be viewed on a website or imported into Excel by using OData web services. | Set Up and Publish KPI Web Services Based on Financial Reports |
| Set up views to analyze data using dimensions. | Analyze Data by Dimensions |
| Create new analysis reports for sales, purchases, and inventory, and set up analysis templates. | Create Analysis Reports |
| Enable global financial reporting to international accounting organizations by using the eXtensible Business Reporting Language (XBRL) standard. | Create Reports with XBRL |
| Change the database access intent on reports, pages of the API type, and queries to help reduce load and improve performance. | Manage Database Access Intent |
See also
Setting Up Finance
Sales
Purchasing
Closing Fiscal Periods
Managing Projects
Importing Data from Other Finance Systems
Work with General Journals
Work with Business Central