All About Customer Groups in Microsoft Dynamics 365 for Finance and Operations

by | Updated August 21, 2018 | Dynamics 365 for Finance and Operations

When beginning a new Dynamics 365 for Finance and Operations implementation, it is common to start looking at some of the basic setups for master data (customers, vendors, items, etc.). Looking at the customer master, it is quickly apparent that there are a lot of different ways to group and categorize your customers within D365. One of these groupings is the Customer Group field which is a required field when creating a new customer.

I am frequently asked, “What are common Customer Groups that companies use?” Given the fact that every company has a unique set of customers, there generally isn’t a “common” set of customer groups. However, if you understand how Customer Groups are used and what other ways there are of categorizing and grouping your customers, it becomes much easier to decide on the Customer Groups that are going to fit your company. Here is some basic information on Customer Groups, how they are used, and what other data can be used on the customer master to categorize your customers:

Customer Groups

Customer Groups are used for categorizing your customers (generally for financial reasons). There are a few defaults that can be set on the customer group which would flow to each customer that was created within the group. These defaults are:

  • Terms of Payment
  • Time between invoice due date and actual payment (for forecasting cash flow)
  • Write-off reason
  • Sales tax group

Only a single customer group can be applied to a customer although it can be changed if necessary.

Customer Groups

The Customer Group can also be used when defining your GL posting rules. For example, when a sales order is invoiced you can specify that the revenue is posted to a GL account based on the item group and/or the customer group.

Customer Groups

Customer Groups can also be used as filters in AR and Sales reporting – Customer statements, Customer aging, etc.

Customer Groups

Aside from Customer Group, there are other fields that can be used on the customer master for categorizing your customers. These include:

  • Classification group (used to prioritize customers especially as it relates to fulfilling orders; it can also be used for sorting or filtering some reports)
  • Line of Business (doesn’t drive any functionality)
  • Segment (doesn’t drive any functionality)
  • Subsegment (doesn’t drive any functionality)
  • Company chain (doesn’t drive any functionality)
  • Sales district (doesn’t drive any functionality)

Customer Group

There are also fields on the customer for defaulting information or driving functionality:

  • Charges group (used to default specific charges on orders)
  • Commission group (used to calculate commissions for the customer – a commissions group generally contains a group of salespeople who will be receiving the commission)
  • Sales group (used to filter customers and orders that fall within a certain group)
  • Sales order pool (used to filter sales orders)
  • Customer rebate group (used for applying rebates for sales orders)
  • Price group (used for applying pricing and/or discount agreements to a group of customers)

Customer Groups

As you can see, there are many ways to group and categorize your customer some of which are for reporting only and some of which drive other functionality. To summarize – your customer groups should be decided based on how your customers differ from a financial reporting standpoint as there are lots of other fields that can be used for categorizing and reporting on your customers. You want to keep your list of customer groups small and high-level enough that it is very clear which customer group should be applied to each of your customers.

Related Posts

2 Comments

  1. Eugen Glasow

    Your view is US-centric, naturally. In Europe there is a common set of customer groups. At first, you divide them into affiliated (‘intercompany’) and not affiliated, and the latter are typically classified into Domestic, Intra-community (i.e. fellow members of the European Union) and 3rd countries (the USA and Russia, for example 😉 customers. This classification follows the harmonized Corporate tax and VAT regime.

  2. Taylor Valnes

    Hello Eugen,

    Thank you for the different perspective!

    Regards,
    Taylor

Submit a Comment

Your email address will not be published. Required fields are marked *

Upcoming Events

march

03mar10:00 am10:30 amThe Modern Manufacturer - MRP vs. MPS – What, When and How

03mar2:00 pm2:30 pmLot Management Best Practices for Batch Manufacturers

10mar10:00 am10:30 amEnhancing the Customer Experience and Driving More Business with Dynamics 365 Customer Service

10mar2:00 pm2:30 pmThe Five Steps to Managing Sales Tax

11mar11:00 am12:00 pmConfab with Stoneridge - Livestream - Power Apps Component Framework Power Hour

17mar10:00 am10:30 amThe Modern Manufacturer: Pro Tips for your Finance Team

24mar10:00 am10:30 amUnlock the Potential of Digital Marketing with Dynamics 365 Marketing

25mar11:00 am12:00 pmConfab with Stoneridge - Livestream - The Four Keys to Choosing the Best ERP or CRM Solution

31mar10:00 am10:30 amThe Modern Manufacturer: Keys to Reporting Success

31mar01aprTraining Class: Financial Reporting W/Account Schedules for Dynamics 365 Business Central

april

31mar01aprTraining Class: Financial Reporting W/Account Schedules for Dynamics 365 Business Central

07apr10:00 am10:30 amBoost Seller Productivity and Close More Business with Dynamics 365 Sales

07apr2:00 pm2:30 pmEnsuring Quality for Batch Manufacturers

08apr11:00 am12:00 pmConfab with Stoneridge - Livestream - Jumping into the Deep End of the Data Lake

14apr10:00 am10:30 amThe Modern Manufacturer: Cost Accounting in D365

21apr12:00 pm1:00 pmGetting Started with Barcode Scanners and WMS Apps for Business Central

22apr11:00 am12:00 pmConfab with Stoneridge - Livestream - Moving from Manual to Automated with Strategic Automation Strategies

28apr10:00 am10:30 amThe Modern Manufacturer: Best Practices for Inventory Turn

28apr12:00 pm1:00 pmPower Up Microsoft Dynamics by Automating Budgeting, Dashboarding and Reporting

About Stoneridge
Stoneridge Software is a unique Microsoft Gold Partner, with emphasis on partner. With specialties in Microsoft Dynamics 365, Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP and Microsoft Dynamics CRM, we focus on attracting the most knowledgeable experts in the field to our team, and prioritize delivering stellar solutions with maximum impact for your business. At Stoneridge, we are deeply committed to your results. Each engagement is met with a dedicated team, ready to provide thorough, tailored, and expert service. Based in Minnesota, we intentionally “step into your shoes,” wherever you are. We focus on what you care about, and develop trusting, long-term relationships with our clients.

Subscribe To Our Blog

Sign up to get periodic updates on the latest posts.

Thank you for subscribing!

X