Quick Tips to Optimize Microsoft Dynamics 365 Business Central Financial Management Module| FB Consultancy

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Microsoft Dynamics 365 Business Central is the worthy solution for SME’s. This system is able to help increase productivity, reduce costs and simplify administration — all while simplifying your IT management with a single system of record. However, a system is only good if it’s used to it’s full potential!

So here is a little blog on how to turn a good implementation into a great one, and there’s no better place to start than the Financial Management Module!!

1. Optimise your General Ledger Account

It’s a good idea to make use of distinct account numbers for each transaction sort: sales account vs discount sales account, local sales vs international sales account, COGS (Cost Of Goods Sold) in transit (shipped but not invoiced) vs COGS (shipped and billed), and so on.

This will give you

• Reconciliation of data from G/L to sub ledgers
• Easy understanding of General Ledger entries creation (posted and on preview-post)
• Retro-figures in certain accounts are available via a simple interface (e.g., “What was my goods in transit balance 3 months ago?” … or COGS interim, etc

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2. Select ‘Direct Posting’ for accounts placed in a posting setup table only if absolutely necessary

The reason for this is simple: if a user manually submits a journal entry directly in the general ledger, it will result in an unbalanced reconciliation between the ledger and sub-ledger figures. To avoid such events from happening, make sure you deselect the “direct Posting” option.

As a result, there must be an entry in the inventory tables for each transaction entered in the inventory accounts (e.g., item ledger table or value entry table) for each transaction posted to the inventory accounts. For example, when a sales transaction is submitted, it generates entries in both the inventory tables and the inventory accounts on the chart of accounts.

3. Run the “Adjust cost batch” job through the job spooler every night, even if automatic adjust cost and post cost are turned on.

When you have a large ledger, a nightly job is a great way to ensure that all postings are processed. It’s also a good idea to check if there were any problems with the job.

4. Adjust Posting dates

BC is famous for having a system that uses the most restrictive ones.

Keep an eye on these pages;

The General Ledger Setup page is where you can set default settings for the general ledger and other financial application areas, as well as control certain system behaviour’s. Each firm must have its own General Ledger Setup page.

The use of inventory periods is to manage posting of inventory adjusting entries. Unless inventories are closed on a monthly basis, adding entries will post in the period of the original transaction. Closing and creating inventory periods will prevent the inventory adjustments from showing in that time period. If the original transaction is posted on a closed inventory date, the value of the modifications is recorded as of the first day of the first open inventory period. This ensures that General Ledger values for inventories, costs, and sales do not fluctuate after month- simple? :-)

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5. Yes, you’ve guessed it, you can enable ‘Prevent negative inventory’ in the Inventory setup and Item card.

Its a little known or practiced “quick win”, By default, Microsoft has imposed a limit on manufacturing consumption when inventory reaches negative. We also know that this limitation was put in place to avoid accounting anomalies (particularly if items are on average cost) owing to the system’s inability to apply relevant demands and supplies.

Let’s assume you have an excellent inventory accuracy. There should be no negative inventory at the end of any day if your replenishment planning is working properly. Negative inventory indicates that your reordering system is relying on incorrect data, which results in wrong reordering suggestions, and your costing system will not reflect accurate inventory or COGS values.

Changing the system to never allow negative inventory is a simple method to avoid unwanted inventory. This appears to be a good idea in theory, but I believe it would be too much of a culture change for some organizations. You can see how this might go if, at year-end, the boss asks why you didn’t make the shipment that would have been the last one before going into negative inventory!

It’s best to discover the components that are causing a bad inventory and then correct them. However, keep in mind that inventory values should never be negative, so it’s just as crucial to solve the underlying problem that caused the poor inventory in the first place.

6. Keep track of vendor invoicing with vouchering

Reconcile Inventory Sub-Ledger With General Ledger Frequently, go to;

Inventory to general ledger reconciliation -> inventory valuation report -> reconcile accounts payable to general ledger to ultimately improve accuracy thus improving confidence from other users

7. Consistently Train and Develop your Users

To grasp and facilitate learning of a new ERP system, basic accounting knowledge should be possessed by key users. A typical key user should have a good understanding of financial phrases such as Chart of Accounts, Credit / Debit, Profit & Loss, Balance Sheet, Taxation, Basic Accounting (like Invoicing, Bank, FA) etc.

In conclusion then

Whilst we are at heart an SAP focussed consultancy, our passion is tech and its ability to change the way we do business, optimising that tech (whoever it comes from) is a win for us.

This article has provided a lot of information about how to set up and optimise Microsoft Dynamics 365 Business Central, but it’s important that you don’t forget some other key considerations. You should also be teaching your team the basics of accounting so they can use this system more effectively — even if they’re not doing any financial tasks themselves. The need for training is an essential part of building a strong ERP foundation from day one, which will make life easier in the long run. If you have questions or would like help with implementing these tips, feel free to reach out!