If so, the underlying reason is often simpler than people expect, and it usually comes down to using Resources or G/L Accounts where Business Central was designed for Item Type Service. Which makes this a perfect topic for Sharing the Righter WayTM.
Every time I teach this distinction, someone realizes they are still doing things the old NAV way instead of the modern Business Central way. And they are not wrong for that. Both end users and consultants repeat this pattern because it is familiar, it used to work, and in many companies, it is simply “the way we have always done it.”
This is the classic legacy hangover — and not the drinking type.
Just the kind that quietly persists long after the system has evolved.
Yet this misunderstanding has real impact. Using Resources when you should be using Item Type Service leads to inconsistent posting, confusing reporting, pricing gaps, and permissions issues. And choosing a G L account on a document line only magnifies the problem.
The good news is that this is one of the easiest structural misunderstandings to fix.
It starts with one simple decision model, illustrated in the graphic below.
Start with the simplest question
Everything flows from a single decision:
Are you tracking the effort of a person or machine?
If yes, that is a Resource.
Are you buying or selling something?
If yes, that is an Item Type.
Business Central becomes dramatically easier to use — and far easier to report on — once you stop mixing these two worlds.
Why Item Type Service exists (and why it matters)
Item Type Service is not just a label. It lives inside the full Item framework, which means you immediately gain:
- Pricing through Price Lists and Sales Prices
- Discount logic
- Units of measure
- Extended text
- Item attributes and categories
- Item references and vendor item numbers
- Item charges
- Full item-based reporting and analytics
The graphic shows these capabilities in the right-side box labelled Capabilities – All Item Types.
These features are the reason Item Type Service is the correct structure when you sell a service of any kind:
- Installation
- Training
- Consulting
- Delivery
- Fees
- Project based services
If a customer pays for it or you buy it from a vendor, it belongs in the Item system, not the Resource system.
Where Resources truly belong
Resources are essential, but not for selling. They are designed for internal operational activities:
- Job costing
- Service management labor
- Manufacturing labor
- Capacity and utilization
- Cost per hour or machine hour
- Scheduling and calendars
Resources do not have item pricing.
They are not treated as products.
They exist to represent labor and internal effort — not something sold to a customer.
This distinction is key.
And the graphic makes that clear.
Why selecting a G L account on a document line is the most dangerous choice
The red path in your visual highlights the third option:
Selecting a G L account on a sales or purchase document line.
This is the one choice that breaks more than it fixes.
Using a G L account directly:
- Bypasses pricing
- Bypasses discounts
- Bypasses attributes and categories
- Blocks item analytics
- Creates inconsistent posting patterns
- Exposes sensitive expense accounts to non accounting staff
- Makes audits dramatically harder
- Erodes the entire structure your Finance team relies on
This option exists for journals, not for transactional documents.
When users select a G L account on a line, it is usually a sign that the underlying Items or setup need attention.
Do not normalize this.
Do not train toward it.
Do not accept it as “quick” or “easier.”
It always costs more in the long run.
Why this concept deserves renewed attention
This is one of those quiet foundational topics that has a disproportionate impact on the quality of your Business Central environment.
The misunderstanding persists because:
- Old NAV habits never fully disappeared
- Consultants still sometimes teach the legacy approach
- End users repeat what they were originally shown
- Jobs, Service, and Manufacturing modules also contain Resources
- The system does not block the wrong choices
- G L accounts look “fast and easy” in the moment
But once you map the decisions visually — as in the diagram above — everything becomes clear:
- Effort → Resource
- Anything sold → Item
- Services sold → Item Type Service
- G L account → only in controlled accounting journals
This is exactly the kind of practical clarity “Sharing the Righter Way” is meant to bring forward. When teams understand this distinction, posting becomes cleaner, reporting becomes meaningful, pricing becomes consistent, and everyone stops fighting the system.
Checklist: Bring your system back into alignment
This checklist is designed to stop the cycle of “we have always done it this way” and help both consultants and end users make better structural decisions in Business Central.
Use it whenever you are setting up new service offerings, reviewing sales posting flows, designing a chart of accounts, or cleaning up legacy NAV patterns.
1. Start with the core question
✔ Are you tracking the effort of a person or machine?
→ Use a Resource
✔ Are you buying or selling something?
→ Use an Item Type
✔ Is anyone suggesting a G/L account on the document line?
→ Stop and redirect immediately
2. If you are selling a service, confirm it belongs as Item Type Service
✔ Does this offering need pricing or discounts?
✔ Do you want it included in sales reporting?
✔ Should it appear in catalogs or lookups?
✔ Does it belong in your item based analytics?
✔ Does it need units of measure, extended text, or attributes?
If yes to any of these, the correct choice is:
Item Type Service
Not Resource.
Not G/L account.
3. Validate Resource is being used only in correct operational contexts
✔ Job costing
✔ Service management labor
✔ Manufacturing labor
✔ Capacity and utilization
✔ Internal cost tracking
If the activity earns revenue from a customer, it is not a Resource.
4. Enforce the rule: G/L accounts belong in journals, not documents
✔ No sales line should ever use a G L account
✔ No purchase line should use one either
✔ Users should not have access to post expenses through documents
✔ Pricing logic should never be bypassed
✔ Item analytics should never be broken by direct posting
If someone is selecting a G L account to “make it quick,” your process has a training gap.
5. Look for signs of the legacy hangover
✔ Are Resources being used for installation, consulting, delivery, or fees?
✔ Do your consultants default to Resource because that is how NAV “used to do it”?
✔ Do users resist Item Type Service because “that is not what we used before”?
✔ Do reports look fragmented because services are not in the Item ledger?
✔ Are discounts or pricing rules unmanageable because Resources are involved?
If any of these exist, the system is still carrying the old NAV-era workaround forward.
6. Make structural corrections now, before scaling
✔ Migrate service offerings from Resource to Item Type Service
✔ Rebuild price lists using item-based pricing
✔ Review permissions to ensure G/L accounts cannot be selected on documents
✔ Align categories and attributes so service items group logically
✔ Educate teams: Resources are internal cost, Items are external sale
7. Confirm with this final rule of thumb
✔ If it effort → Resource
✔ If it is sold → Item
✔ If someone wants a G/L account → possible future audit problem
Created as part of Sharing the Righter Way, this article blends my hands-on Business Central experience with research and analysis supported by AI. I use AI as a thinking partner to explore angles, validate patterns, and accelerate the writing process, while all conclusions, explanations, and recommendations reflect my own professional judgment. The result is clearer guidance, deeper insight, and a more practical path forward for Business Central users and teams.
References (click to expand)
1. Item Types (Inventory, Non-Inventory, Service)
Understanding how each item type behaves, including why services sold to customers should be defined as Item Type Service.
https://learn.microsoft.com/dynamics365/business-central/inventory-how-register-new-items#item-types
2. Resources: Creating and Managing Labor or Machine Costs
Defines Resources and clarifies their intended use for internal effort, job costing, service work, and manufacturing labor.
https://learn.microsoft.com/dynamics365/business-central/projects-how-create-manage-resources
3. Resource Costs, Capacity, and Utilization
Reinforces that Resources represent time based internal cost rather than items intended for sale.
https://learn.microsoft.com/dynamics365/business-central/projects-resource-costs
4. Using Items on Sales Lines
Highlights why items provide pricing, discounting, and reporting that G L accounts and Resources do not.
https://learn.microsoft.com/dynamics365/business-central/sales-how-sell-products
5. Item Pricing and Price Lists
Supports why items of all types, including Service, benefit from structured pricing.
https://learn.microsoft.com/dynamics365/business-central/sales-set-up-item-prices
6. Chart of Accounts and Direct Posting Controls
Explains how direct posting on G L accounts works and why it should be restricted for non accounting users.
https://learn.microsoft.com/dynamics365/business-central/finance-setup-chart-accounts
7. General Ledger and Document Posting Flow
Reinforces that G L accounts belong in journals, not on day to day sales or purchasing documents.
https://learn.microsoft.com/dynamics365/business-central/finance-general-ledger
