# Line item coding for Dynamics 365 Finance

Dynamics 365 Finance has line item coding built in. Pulsify reads each line and suggests its main account and sales tax code from how that vendor was coded before.

Line item coding means giving every line on a supplier bill its own main account, sales tax code and tracking, not one code for the whole bill.

## What Dynamics 365 Finance does on its own

Accounting distributions with split by percent, amount or quantity and financial dimensions.

## What you need in Dynamics 365 Finance

- Financial dimensions set up
- Accounts payable clerk role

## Setting it up in Dynamics 365 Finance

Where to find it: Vendor invoice line > Financial dimensions and Accounting distributions

1. Open the invoice line and its accounting distribution.
2. Use Split to divide the amount by percentage, amount or quantity.
3. Set the main account on each part.
4. Set the financial dimensions on each part.
5. Post. After posting the distributions cannot be changed.

## Good to know in Dynamics 365 Finance

- Distribute equally spreads an amount evenly.
- Without a purchase order, line dimensions merge from the dimension link first, then the invoice header, then the item.
- Default offset accounts can be set per vendor group or vendor for invoice journals.

## How to do it in Dynamics 365 Finance

### How to enter a vendor invoice with line items in Dynamics 365 Finance

In Dynamics 365 Finance, open a new vendor invoice, pick the vendor, add one line per invoice row with a main account and sales tax code, then check the total matches the invoice. Full guide: https://www.pulsify.tech/how-to/enter-a-supplier-bill-with-line-items-in-dynamics-365-finance/

### How to code one vendor invoice to several main account codes in Dynamics 365 Finance

In Dynamics 365 Finance, add a line for each type of cost on the vendor invoice. Set a different main account and sales tax code on each line, then check the total matches the invoice. Full guide: https://www.pulsify.tech/how-to/code-one-bill-to-several-accounts-in-dynamics-365-finance/

### How to set a default main account for each vendor in Dynamics 365 Finance

In Dynamics 365 Finance, open the vendor record and set a default main account and sales tax code. New vendor invoice lines will start with those and you can change any line. Full guide: https://www.pulsify.tech/how-to/set-a-default-account-for-each-supplier-in-dynamics-365-finance/

### How to code a vendor invoice with mixed GST lines in Dynamics 365 Finance

In Dynamics 365 Finance, set the sales tax code on each line of the vendor invoice. Use the GST code for taxable lines and the GST-free code for others, then check the GST total matches the invoice. Full guide: https://www.pulsify.tech/how-to/code-a-bill-with-mixed-gst-lines-in-dynamics-365-finance/

## What Pulsify adds

1. Pulsify reads each invoice into individual line items.
2. Each line gets its own account and its own tax code.
3. The account comes from how that supplier's past bills were coded. The tax code comes from the rate printed on the line.
4. You check every value on an editable review screen before approval.
5. Bulk edit sets the account and tracking on every line of one invoice, or on many invoices at once.

Pulsify connects to Dynamics 365 Finance. We set up the connection for you.

What Pulsify does not do:

- Pulsify aims for 99% accuracy on account and tax coding per line. You still review before approval.
- Splits are by line amount. There are no percentage splits.

## Common questions

### Can Finance split an invoice line by percentage?

Yes. Open the accounting distribution and use Split by percentage, amount or quantity. Set the main account and financial dimensions on each part. Distribute equally spreads an amount evenly.

### Can I change coding after posting?

No. Microsoft says distributions cannot be changed after posting. Reverse and re-enter the invoice or use a general journal adjustment. No bulk account change on posted invoices was found.

### Do I need to set up coding rules?

No. Pulsify learns from how your team coded past invoices for each supplier. A coding note in the forwarding email is followed first.

## Sources

- https://learn.microsoft.com/en-us/dynamics365/finance/accounts-payable/accounting-distributions
- https://learn.microsoft.com/en-us/dynamics365/finance/accounts-payable/vendor-invoices-overview

Source: https://www.pulsify.tech/line-item-coding-for-dynamics-365-finance/ (last checked 2026-10-19)