About posting classes: definition and usage

Each posting class has general ledger accounts assigned to it. These accounts will be used in the following ways:

• As default general ledger accounts for items assigned to the posting class
• As general ledger accounts assigned to the posting class itself as one of the sources for selecting the proper accounts to be used for specific transactions

The list of accounts specified for the posting class includes the following accounts:

• The inventory (Asset) account and subaccount to be used to keep the balance of transactions with the stock item assigned to the posting class or the accrual account (Expense) if the item is a non-stock item
• The reason code subaccount to be used to mark direct inventory transactions with the stock item
• The sales (Income) account and subaccount to be used when the stock item is issued from the inventory for sale (based on sales orders)
• The cost of goods sold (Expense) account and subaccount to be used when the stock item is issued for sale or the expense account when a non-stock item is sold
• The standard cost variance (Expense) account and subaccount to be used when the stock item's cost on the purchase receipt differs from the cost on the inventory receipt (for items with the standard cost valuation method assigned)
• The standard cost revaluation (Expense) account and subaccount to be used to record a gain or loss when the standard cost is updated (for items with the standard cost valuation method assigned
• The purchase accrual (Liability) account and subaccount to be used to accrue amounts on purchase receipts related to the stock item
• The purchase price variance account and subaccount (Expense) to be used to record any differences between the item cost on the purchase receipt and the inventory receipt
• The landed cost variance account and subaccount (Expense) to be used to record any differences between the landed costs specified on the purchase receipts on Inventory receipts

Accounts and subaccounts for inventory transactions related to sales, purchases and valuation of items can be obtained from the sources, depending on the policies established in your company. For example, if only one inventory account is used in your company for all stock items, you might want to provide very specific subaccounts to track which warehouses were involved in every transaction.

In Visma Net, you can choose accounts from the following sources:

Item:	The inventory account for all transactions of the item will be the same regardless of where the inventory transaction occurs.
Warehouse:	The inventory account will vary depending on the warehouse where the inventory transaction is made.
Posting class:	The inventory account assigned to the posting class itself (as specified on the General ledger accounts tab) will be used. This option is helpful when you need to replace the inventory account previously used for items of the posting class with a new account.

Generally, subaccounts to be used for transaction posting can be selected from the same sources as accounts, but since subaccounts consist of multiple segments, you have the option to combine segment values from different sources to get subaccounts that would perfectly reflect all the details of the transaction.

A posting class provides the subaccount masks on the Posting settings tab, which allows you to configure how the subaccounts should be composed using segment values copied from various sources.

Consider a simple example of configuring a subaccount mask for a sales subaccount.

Suppose there are four segments in the subaccounts used in your company, which have the format XX-XXX-XX-XX. For each segment, you have the choice of three options designating the source of the segment value:

• P: Posting class
• I: Item
• W: Warehouse

If you configure the sales subaccount mask as II-III-II-II, it means that for sales transactions, the subaccount specified as sales subaccount for the item will be used.

If you configure the sales subaccount mask as WW-PPP-II-PP, then for sales transactions, the sales subaccount will be a combination of three subaccounts:

• The first segment will be copied from the sales subaccount associated with the warehouse, specified on the General ledger accounts tab of the Warehouses (IN204000) window.
• The second and fourth segment will be copied from the sales subaccount associated with the posting class of the item, specified on the General ledger accounts tab of the Posting classes (IN206000) window.
• The third segment will be copied from the sales subaccount associated with the item, specified on the General ledger accounts tab of the Stock items (IN202500) or Non-stock items (IN202000) window.

Posting classes facilitate specifying general ledger accounts for multiple items assigned to specific classes.
One of the posting classes can be chosen as the default posting class in the Inventory preferences (IN101000) window.

Then, when a user creates a new stock item using the Stock items (IN202500) window, the item is assigned to the default posting class.

If necessary, the user can choose another posting class for the item. Once the posting class is selected, the General ledger accounts tab will have the values (intended for general ledger accounts and subaccounts) filled in for the item, based on the posting class.

Later, on release on a specific inventory document, the system checks the posting class of each stock item and applies the rules of the item's posting class to determine accounts and subaccounts to be used for the transaction.

For example, for each line item in a sales invoice, the system checks the posting class of the stock item, and applies the rules of the item's posting class to determine a sales account and subaccount and a COGS-account and subaccount to be used for the transaction. Depending on whether the Post summary when updating the general ledger option is selected on the Inventory preferences (IN101000) window, the system generates a batch with journal entries grouped by the account / subaccount pair or with full details.

After that, the system generates a batch using the accounts and subaccounts in accordance with the posting classes of the items listed in the document.

When the standard costs for the stock items are changed (at the end of financial year or when needed), the process of updating the standard costs generates inventory adjustments to be posted to the general ledger. The system will use the standard cost revaluation account and the corresponding subaccount determined by the rules defined by the posting class of the item whose cost is being updated.

If upon release of the purchase receipt, there are differences between the purchase receipt amount and the inventory receipt amount, the following accounts will be used:

• For items with the standard cost valuation method, the standard cost variance account and subaccount.
• For items with other valuation methods, the purchase price variance account and subaccount.
• For all items, the landed cost variance account and subaccount to record any differences between the landed costs specified on the purchase receipts and inventory receipts.