Financial Management in Dynamics 365 Finance – An Overview

by | Updated September 16, 2021 | Dynamics 365 for Finance and Operations

Make life easier for your finance team with features and functionality within Dynamics 365 Finance created to streamline and simplify processes. This blog provides an overview of the finance function and key areas to keep in mind.

General Ledger Components in D365 Finance

The general ledger is comprised of the chart of accounts (also called main accounts), dimensions, and structures. Dimensions attach to main accounts, creating structures.

Chart of Accounts in D365 Finance

The chart of accounts is a collection of main accounts that is used as an entity. Compared to legacy segmented accounts, Dynamics 365 main accounts simplify processes by reducing the number of necessary accounts. Accounts can be added by item category and shared by multiple legal entities.

Chart of accounts is found under the general ledger in D365 Finance and Operations

Dimensions in D365 Finance

Dimensions add another level of detail to the main account. They work similarly to segments in legacy accounts but exist behind the scenes as an additional account layer. When creating dimensions, consider what additional detailed information you need to know about main accounts when you drill down. For example, dimensions could include a business unit, product line, department, or sales representative.

GL Structure D365 Finance

The GL structure puts pieces together in a useful way.

4 Pieces: business unit, main accounts, product line, and department

Dimensions are not always relevant, and you may not want to attach all dimensions to all main accounts. Structures allow you to assign applicable dimensions to main accounts. After defining your main accounts and dimensions, assign the chart of accounts and GL structure(s) to the general ledger for the legal entity and activate it.

Automating Dimension Posting: Master Files Financial Dimensions Assignments in D365 Finance

There is a section on financial dimensions within each master file. Once you have defined your entity structure, all possible dimensions in your structure will show on each master card. For example, if customers drive your business unit, you can assign a business unit to your customer card. Every time a transaction happens with that customer, the business unit is automatically attached as a dimension to the account.

The same can be done with released products. Perhaps you would like to assign an item group every time a particular item is used. To accomplish this, go through your item master and assign important item groups. This can also be applied to vendors.

Trial Balance Reporting in D365 Finance

Main accounts and dimensions provide flexible reporting on the trial balance. Define financial dimension sets to meet your needs and use them to view the trial balance at various levels.

Financial Reporter in D365 Finance

The financial reporter runs financial statements, typically at the end of the month. This tool is also used to drill down and see transactions with dimensions. Reporting trees can be set up to run reports by dimension.

How to Start Planning Your General Ledger

When planning your general ledger, start with the end in mind. Review reporting current requirements and imagine what your dream financial analysis reports would look like. Consider customer and product markets as they relate to your business.

Build dimensions to meet identified needs. Create a chart of accounts with only main accounts and design GL structures to assign dimensions. Create your general ledger by merging your COA with your GL structure.

If you’re new to Dynamics 365, or if you’re considering implementing the solution at your business, reach out to the experts at Stoneridge Software. We can help you get the most out of the solution.

 

 

 

 

 

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