Financial dimensions can be a difficult concept to master in Dynamics 365 Finance. But once they are understood, they can be a user’s bestie. They can add power and flexibility to the General ledger. Let us demonstrate how.
What is a financial dimension?
A financial dimesion is an extension of the main account. A suffix if you will. It can be added to the main acocunt to form an account string. It can be used to filter transactions in the ledger for unique purposes in analysis and reporting.
A dimension can be based on another object or structure in D365FO such as Cost centers or Departments. These are called entity-backed dimensions. They can also be user-defined and are called custom backed.
Once the dimensions are determined, an Account structure is created which dictates which dimensions are required with which main accounts. The structure also defines the order of the dimensions. One can also specify if certain combinations of dimensions are allowed or not allowed.
Account structures can include up to 10 dimensions and must be activated within the ledger. A ledger can have multiple account structures assigned to it but a main account can not be included in more than one account structure.
Best practice is to create one account structure for each combination of financial dimensions needed by the business. If a new main account is added to the Chart of accounts, it should be added to the appropriate account structure.
In addition to the account structure, D365FO offers functionaly called Advanced rules. The Advanced rules allow additional requirements to be placed in addition to the defined account structure. An example of an advanced rule is when an additional dimension, Y, is required only of the value of an included dimension is X.
Dimensions can also be used to generate segmented financial statements. In order to insure the financial reports by dimension tie to the trial balance is to use the Balancing dimension functionality which checks to make sure vouchers balance by the balncing dimension.
If one dimension is required to balance, define the Balancing dimension on the ledger form. If multiple dimensions need to balance, enable the Require the dimension to be balanced on the Financial dimension setup.
Financial dimension sets
Dimensions can be configured into sets to optimize the use of dimensions when summarizing General ledger data into the Trial balance and other user-defined reports. Dimension sets help improve performance.
Use the Update balances function to include the latest ledger activity in the balances to be retreived. This can also be completed with a recurring batch job.
Financial dimension order
The order of the dimensions is controlled by the Financial reporting setup page.
Financial dimension configuration
An task that is often forgotten is to configure the Financial dimension configuration for integration applications under General Ledger. This configuration is critical for integrating applications using data entities containing accounts and financial dimensions.
There are multiple dimension formats available:
- Default dimension format – used for importing default dimensions using Data management and the Excel integration. The most common application is when importing default dimensions associated with customers or vendors. Do not include Main account in this format.
- Ledger dimensions format – used for importing ledger dimensions using Data management and the Excel integration. This format is most commonly associated with the General journal and Invoice journal imports.
- Note that if the import does not contain values for all of the possible dimensions, blanks must be included as place holders.
- Budget register dimension format – to determine the required dimensions when importing budget register entries using excel or Data management.
- Budget planning dimension format – to determine the require dimensions whem importing budget planning entries using excel or Data management.
To aid in the coding of Purchase orders and documents that result in posting to ledger, D365FO provides the Financial dimension default template functionality. Templates can be created and then applied as needed to aid in the distribution of the posting to multiple combinations of dimensions.
Note the application of the template on the Purchase order:
Financial dimension defaults
Dimensions can be set up to default to documents in many cases saving the user from having to enter them and to insure the dimensions are correct on the vouchers.
- By journal name.
- By Vendor
- By Customer
- By Worker and/or Position
- By Item
- By Project
- By Project Contract
- By Asset
- By Bank account
- By Main account
When documents or transactions are created, and dimensions default from multiple sources, the dimension values are merged which can be determined by configuration.
And the icing on the cake is the fact that D365FO validates the financial dimensions at certain points in the proccesses in which they are used. The validation follows all of the dimensions configuration discussed above. If there is a violation of some kind, and error message will be displayed on screen.
Some processes that include validation of the dimensions include:
- Validation on Journals
- Can be triggered by using the Validate action.
- Will be triggered at Post.
- Purchase order validation
- Dimensions will be validate at submit to workflow.
- Dimensions will be validated at posting of receipt.*
- Vendor Invoice
- Dimensions will be validated at invoice post.
- Journal import
- Dimensions will be validated at Publish and error messaging will appear in the Excel tool bar.
*Note: Validation at posting of receipt only occurs if Post product receipt in ledger is enabled.
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