Microsoft Dynamics AX 2012 Financial Data Management – Part 1

Whether you’re looking into Microsoft Dynamics AX 2012 as an upgrade to your existing installation or as a brand new implementation, the new features provided by recent changes to charts of accounts, financial dimensions and related data are well worth a look – from both a setup point of view and for end-users of AX 2012 they can really make a change to how your accounting information works for your business.

This article is the first in a 3-part series on Dynamics AX 2012 Financial Data Management. I’ve split the topic into broad functional areas, which I’ve called:Microsoft_Dynamics_AX_product_tile_334x334

  1. Sharing
  2. Scoping
  3. Selecting


We’ll start with sharing

In previous versions of Microsoft Dynamics AX, a chart of accounts was created on a company by company basis: for any organisation that had centralised their accounting structure (or wanted to), each change would have to be repeated in every legal entity using the system – a time-consuming and error-laden task. For large companies with complex charts of accounts, this could quickly become unmanageable. With Microsoft Dynamics AX 2012, finance users have the ability to set up shared charts of accounts, and when new companies are created they can be assigned one of these rather than a local chart of accounts.

As you can imagine, this is of huge benefit to multiple parties, including:

  • Financial decision makers wanting a consistent accounting approach
  • Reporting functions needing reliable data frameworks for easy BI strategies
  • Centralised day-to-day roles, where legal entity has no impact on business processes.

A handy new feature (which appears throughout AX 2012) is the Translations Form, where users setting up a shared chart of accounts can give multi-language values for account descriptions. This way, AX 2012 just looks at a user’s language settings and provides the shared chart of accounts in the appropriate local language.

Along with shared charts of accounts, organisations now have the ability to share fiscal calendars: similar to the sharing of charts of accounts discussed above, this allows the consolidation of business processes to ensure that month-end and year-end processes are aligned across every business unit. It also ensures that legal entities also comply with the organisational framework for frequency-dependent functions, such as budgeting and fixed asset depreciation. Legal entities can still open and close periods individually, however, so one entity’s efficiency doesn’t impact any others.

Last but definitely not least, financial dimensions are now also shared across organisations. This obviously brings the level of maintenance required right down, and makes comprehensive and detailed dimensioning of financial transactions on an enterprise level a lot more realistic. Another time-saving change is that a developer is no longer required to create a new dimension in Dynamics AX 2012, allowing the accounting department in an organisation to have real ownership of the way their data is handled. (On a technical level, the way financial dimensions are stored in Dynamics AX 2012 has also changed significantly, but as this isn’t really the place to discuss it, I’ll just add a link to a good Microsoft white paper on the subject)

One of the most exciting changes to dimensions in Microsoft Dynamics AX 2012 is how the dimension values themselves can be populated. In previous versions, a user would have to define and data-enter each possible dimension value manually: in Dynamics AX 2012 dimensions can be linked to entities that exist elsewhere in the organisation’s data and these are then updated automatically as the source data change. For example, if an organisation has a dimension for ‘Employee’, it can be linked to Dynamics AX’s HRM module, and when new staff come on board or old staff leave, the valid dimension values update automatically. The logic even encompasses date-based changes – so if a staff member’s leaving date is entered as 01 March 2013, all financial transactions that are booked with an accounting date in February or earlier would be allowed to post using that staff member’s dimension value, but transactions in March or later would not allow selection of that staff member.

The full list of available ‘out of the box’ links to entities is:

Agreements, bank accounts, business units, campaigns, cash accounts, cost centres, customer groups, customers, deferrals, departments, expense and income codes, expense purposes, fixed asset groups, fixed assets, funds, item groups, items, jobs, legal entities, POS registers, positions, project contracts, project groups, projects, prospects, resource groups, resources, retail channels, stores, supplier groups, suppliers, value streams, workers.

As you can see, the new dimension functionality in Microsoft Dynamics AX 2012 really eases the maintenance burden on getting quick and detailed financial information across an entire organisation.

In the next article, I’ll be looking into ‘scoping’ – the new ‘Account Structures’ and ‘Dimension Sets’ functionality which replaces previous versions’ dimension focuses and dimension set rules, and allows companies to tailor valid dimension combinations to as fine a degree as they require while being flexible across large organisations.

For more information on financial data management in Dynamics AX 2012, I highly recommend the Microsoft white paper on the subject.

3 replies
  1. Estelle Marom
    Estelle Marom says:

    Hi Angus, thanks for your comment.
    Parts 2 and 3 should be coming shortly. In the meantime, please feel free to register to the RSS feed and we’ll let you know as soon as they get published!

  2. Hemal Shrimarkar
    Hemal Shrimarkar says:

    Thanks!!! Really in Microsoft dynamics AX part1 you give very informative information.

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