General Ledger Setup
The General Ledger is the heart of Business Central's financial engine. Before posting a single transaction, you need to configure GL setup, accounting periods, payment terms, and payment methods.
The General Ledger — your financial foundation
The General Ledger is like the master scoreboard for your business.
Every financial transaction — a sale, a purchase, a payment, a journal entry — eventually writes a score to the GL. The chart of accounts is the list of categories on the scoreboard (Revenue, Expenses, Assets, Liabilities). The GL Setup page controls the rules of the game: what currency you use, which fiscal year you’re in, and how rounding works.
Get the GL Setup wrong and every number in every report will be wrong. That’s why Priya configures it first, before anything else in the financial module.
General Ledger Setup
Open General Ledger Setup (Tell Me > “General Ledger Setup”). The key fields:
General tab
| Field | What It Controls | Example |
|---|---|---|
| Allow Posting From / To | Date range when posting is allowed | 01/04/2026 to 30/04/2026 |
| Register Time | Enable time registration for resources | Enabled for service companies |
| Local Currency | The company’s home currency | NZD, USD, GBP |
| LCY Code | Currency code for the local currency | NZD |
Application tab
| Field | What It Controls |
|---|---|
| Appln. Rounding Precision | How precisely amounts are matched when applying payments |
| Payment Discount Grace Period | Extra days allowed for payment discounts |
| Payment Tolerance % | Percentage tolerance for payment matching |
| Max. Payment Tolerance Amount | Maximum amount difference tolerated in payment matching |
Exam tip: Allow Posting From/To
The Allow Posting From and Allow Posting To fields are critical for period control:
- They prevent users from posting to closed periods (accidentally backdating entries)
- They prevent users from posting to future periods that aren’t ready
- These can also be set per user in the User Setup page (overrides the GL-level setting)
- The exam tests this: “How does Olivia prevent users from posting to last month?” — Answer: set Allow Posting From to the first day of the current month
Accounting periods
Accounting periods define your fiscal year structure. Most companies use 12 monthly periods, but Business Central supports custom period lengths.
Setting up accounting periods
- Open Accounting Periods (Tell Me > “Accounting Periods”)
- Create periods for the fiscal year:
- Starting Date of each period
- Name (e.g., January 2026, February 2026)
- New Fiscal Year — check this on the first period of each year
- The first period with “New Fiscal Year” checked marks the start of a new year
Closing a fiscal year
At year-end, Olivia runs Close Year on the Accounting Periods page:
- This marks all periods in the year as closed
- Closing a year does not block posting by itself — posting is controlled by Allow Posting From/To
- A Close Income Statement batch job transfers P&L balances to retained earnings
Closing vs locking periods
Two different concepts:
- Closing periods (Accounting Periods > Close Year) — marks the fiscal year as closed and enables the Close Income Statement process. It does not prevent posting.
- Locking periods (Allow Posting From/To) — prevents posting to date ranges
You can lock a period without closing the year, and you can close the year while still allowing posting adjustments to specific dates. Use both together for proper period control.
Payment terms
Payment terms define when invoices are due. They’re assigned to customers and vendors and automatically calculate due dates on documents.
| Code | Description | Due Date Calculation | Discount % | Discount Date |
|---|---|---|---|---|
| NET30 | Net 30 days | 30D (30 days from invoice date) | 0% | — |
| NET60 | Net 60 days | 60D | 0% | — |
| 2/10NET30 | 2% discount if paid in 10 days, net 30 | 30D | 2% | 10D |
| COD | Cash on delivery | 0D (due immediately) | 0% | — |
| CM | Current month | CM (end of current month) | 0% | — |
Date calculation formulas
Business Central uses a specific syntax for date calculations:
| Formula | Meaning |
|---|---|
| 30D | 30 days |
| 1M | 1 month |
| CM | Current month (end of) |
| CQ | Current quarter (end of) |
| 1M+CM | 1 month from invoice date, then end of that month |
| D15 | The 15th of the month |
Example: Payment terms “1M+CM” on an invoice dated March 10 = due April 30 (one month ahead = April 10, then current month end = April 30).
Exam tip: Date calculation edge cases
The exam loves testing date calculations:
- 30D vs 1M — 30D is always 30 calendar days. 1M depends on the month (28-31 days). For February invoices, they differ.
- CM = end of the current month (relative to the invoice date, not today)
- CQ = end of the current quarter
- 1M+CM = calculate 1M first, THEN apply CM to the result
Practice calculating due dates with different formulas and invoice dates.
Payment methods
Payment methods define HOW payment is made (not when — that’s payment terms). Common methods:
| Code | Description | Bal. Account Type | Use Case |
|---|---|---|---|
| BANK | Bank transfer | Bank Account | Standard business payments |
| CASH | Cash | G/L Account | Retail, petty cash |
| CHECK | Cheque | Bank Account | Traditional paper payments |
| CARD | Credit/debit card | G/L Account | Online sales |
| DD | Direct debit | Bank Account | Recurring collections |
Each payment method can have a Balancing Account — a default bank or GL account that auto-fills when this method is used. This saves time on journal entries.
When Olivia sets up vendor “Express Shipping Ltd” with payment method BANK and payment terms NET30, every purchase invoice from them will: (1) be due 30 days from invoice date, and (2) default to bank transfer as the payment type.
Knowledge check
Olivia wants to prevent all users from posting transactions to March 2026, which is now closed. She also wants to allow one senior accountant to post adjustments to March if needed. How should she configure this?
A vendor invoice dated March 15 has payment terms '1M+CM'. When is the invoice due?
Next up: With the GL foundation in place, let’s tackle currencies, deferrals, and exchange rate management.