A Business Central glossary of the terms new users ask about

Business Central glossary of finance terms

Start with the G/L account. It is a line in the chart of accounts. Posting groups come next. These mapping tables tell a transaction which accounts to use. General business and product posting groups choose revenue and cost accounts. Customer, vendor and inventory posting groups choose the balance sheet accounts.

Dimensions are tags, such as department or project, added to entries for analysis. So the chart of accounts stays short. Every ledger entry is the permanent record that posting creates. However, nobody can edit it. Meanwhile, a journal is an unposted worksheet of lines. Finally, a number series controls how documents are numbered.

Inventory and warehouse vocabulary

Any item you buy, make or sell has a costing method. That method decides how cost is worked out. Then there is the location, which is a warehouse or site. Also, inside a location sits the bin. Last, a stockkeeping unit is an item at one location or variant, with its own planning values.

Each quantity movement leaves an item ledger entry. But its cost sits in a value entry. Item tracking means lot and serial numbers. Planning follows a reordering policy to replenish. For freight or duty, use an item charge, which adds to the cost of received goods. Put-away and pick are warehouse instructions.

Document terms in sales and purchasing

Think of a quote as an offer. An order is a commitment, and an invoice is the bill. Posting an order can ship, invoice or both. That creates posted shipments and posted invoices. Credit memos reverse all or part of an invoice. For long agreements, use a blanket order, which is delivered in several parts.

Released means a document is approved for the warehouse and locked from casual edits. Open means it can still change. Then comes applying, which is matching a payment to an invoice. Drop shipments go from vendor to customer directly. Finally, a prepayment is an invoice for part of the amount before delivery.

A Business Central glossary of platform terms

One copy of Business Central is an environment, either production or sandbox. Inside it, each company is a separate set of books. Your tenant is your organization's space in Microsoft's cloud. Extensions are add-ons written in the AL language. So they change behavior without altering Microsoft's code.

Every job has a home page, called a role center. Permission sets bundle access rights. Meanwhile, the job queue runs tasks on a schedule. For bulk loads, use a configuration package to move setup and master data. Finally, a release wave is one of the two major updates that Microsoft ships each year.

Words you hear during an implementation

Fit-gap analysis compares your processes with the standard system. Then it lists where they differ. Configuration is setting up standard features. Customization is writing extensions. Data migration moves customers, vendors, items and balances from the old system. Opening balances are the ledger figures that the new system starts with.

Before launch, your own staff run real scenarios. That is user acceptance testing. Cutover is the switch from the old system to the new one. Go-live is the first working day on Business Central. Is a term on a proposal or in a meeting unclear? Ask us, and we will explain it plainly. Keep this Business Central glossary open as you read.

Questions about this Business Central glossary

What is the difference between a company and an environment?

An environment is a whole installation with its own database, extensions and update schedule. A company is a set of books inside it. One environment can hold several companies. They share extensions but keep separate ledgers and master data. So you create a new company for a new legal entity, and a new environment for testing. This Business Central glossary entry trips up many new users.

What is a posting group in simple terms?

It is a label on a customer, vendor or item. It tells Business Central which general ledger accounts to use when a transaction posts. Staff pick customers and items. The posting groups then choose the accounts behind the scenes. So a small change to a posting group can move a whole stream of postings. That is why finance should own them.

Is an extension the same as an app?

In practice, yes. An extension is the technical package. An app is the same thing, once it is published for others to install. Both are written in AL, and both add to Business Central without changing the base application. So when a vendor talks about an app, you can read it as an extension that you install from Microsoft's marketplace.

What does posted mean?

Posting turns a document or journal line into permanent ledger entries. After posting, the entries cannot be edited or deleted. You fix mistakes with a correcting document, such as a credit memo or a reversing journal entry. This keeps a clear audit trail. It also means that checking a document before you post it is a habit worth building.

What is the difference between Essentials and Premium?

They are the two full user license types. Essentials covers finance, sales, purchasing, inventory, warehousing and projects. Premium includes everything in Essentials and adds manufacturing and service management. Microsoft publishes current prices on its own site. Our licensing page explains how to count users by role, and it shows where a cheaper license type fits.

Guides that build on this Business Central glossary

Once the vocabulary of this Business Central glossary is familiar, these guides go deeper. They explain what the product is and the modules it contains. They also show how the parts work together, and how posting groups drive the ledger. Read the modules guide first, since it ties many of the terms above to the pages where you use them. For the product detail, see Business Central documentation on Microsoft Learn.