Ledger posting groups
Ledger posting groups constitute the foundational bridge between the Tax Engine and the General Ledger. Before any tax mathematics can be executed, the system must definitively know where to post the resulting financial liabilities or assets.
A Ledger posting group aggregates tax activities and maps them to specific main accounts, ensuring that collected taxes (Output Tax) and paid taxes (Input Tax) are accurately and automatically recorded in your Chart of Accounts.
Creating a Ledger posting group
To configure a posting group, navigate to Tax > Setup > Sales tax > Ledger posting groups.
The configuration requires the definition of a unique identifier in the Code field (e.g., VAT_STD, EXCISE) alongside a human-readable Description (e.g., Standard VAT Posting Group).
Posting group information
The core configuration resides within the Posting group information section, which dictates the precise General Ledger routing:
- Tax payable account: The liability account that is credited when you collect tax on behalf of an authority (for instance, on a Sales Invoice). This is universally mapped to a current liability account, such as
2400 - Tax Payable. - Tax receivable account: The asset account that is debited when you pay tax on a purchase and are legally eligible to claim it back (for instance, on a Vendor Invoice). This is mapped to a current asset account, such as
1500 - Tax Receivable.
The accounts selected here must be active and valid Main Accounts within your General Ledger. The mathematical output of any subsequent Sales Tax Code assigned to this group will universally flow into these specific ledger nodes.
Next Steps
With the ledger mapping formally established, the next configuration requirement is to define the actual governmental or regulatory bodies that collect these funds. Proceed to the Sales tax authorities documentation.