An exciting new functionality is now available in Dynamics 365 for Operations. A Cost Accounting Ledger is now available to take Cost Accounting to a new level. In previous AX versions, cost accounting functionality has been available, but with the creation of the Cost Accounting Ledger, Microsoft has opened up a completely new realm of possibilities.
The Cost Accounting Ledger is a stand-alone structure, defined with currency and a calendar. Multiple cost accounting ledgers can be put in place as the organization requirements dictate and creativity runs wild. Management Reporter can then utilize the cost accounting ledgers to report out the many views of cost that a company needs to see.
Foundationally, Cost Elements are used to classify or categorize the cost transactions, and Cost Objects are used to aggregate the costs.
Before Cost Accounting Ledgers can be implemented, the set-up to be done includes:
- Cost Element Dimensions
- Cost Object Dimensions
- Statistical Dimensions (optional)
- Dimension Hierarchies
- Cost Accounting Ledgers
Cost Element Dimensions
Let’s walk through the setup required. First, establish the Cost Elements to be used in the Ledger.
Navigate to Cost Accounting > Dimensions > Cost Element Dimensions
The main accounts can be imported into Cost Accounting, to be used as Cost Element Dimensions, by using the Data Connector. Cost Element Dimensions can also be imported using Excel. And Cost Element Dimensions can be entered manually. If Secondary Cost Element Dimensions are desired, they must be entered manually.
Cost Object Dimensions
Next, the Cost Objects. Something meaningful to be used to analyze cost. Navigate to Cost Accounting > Dimensions > Cost Object Dimensions.
Cost Object dimensions can be imported using the connector or Excel, as the Cost Element Dimensions can be. Or they can also be manually entered. Cost Object Dimensions are used to roll up, or aggregate, the costs. Think of product families, projects, cost centers, and departments as Cost Objects.
Statistical Dimensions are optional and used in allocations or statements. Think of hours or square feet.
Navigate to Cost Accounting > Dimensions > Statistical Dimensions to set up Statistical dimensions.
Hierarchies can then be established based on the Dimensions created for reporting purposes. One way to view the data using the hierarchy is by using the Cost Controlling Workspace. Yet another is by using Excel.
Navigate to Cost Accounting > Dimensions > Dimension Hierarchies to establish a hierarchy.
Cost Accounting Ledger
Now on to the CA Ledger set up. Navigate to Cost Accounting > Ledger Setup > Cost Accounting Ledgers
Create Cost Control Units to define the Cost Accounting Ledger Flow.
Once the Setup is complete, General Ledger transactions are imported to the Cost Accounting Ledger using the connectors defined during the set up.
Note: Creation of Cost Behavior Policies should be used to determine if costs are variable, semi-variable or fixed.