Microsoft Dynamics AX 2012 Financial Data Management – Part 2

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 second 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:

  • Sharing
  • Scoping
  • Selecting

In this article we’ll deal with scoping.

While a large chart of accounts with comprehensive dimension values can be necessary for complex organisations, most business functions will only ever interact with a subset of these. In order to eliminate impossible combinations (whether through mistyping or misunderstanding), Microsoft Dynamics AX 2012 comes with a brand new functionality to fine-tune how user dimension selection is controlled and validated: account structures.

With account structures, we see a slight departure from the traditional, tabular account-versus-dimension concept. Dimensions and dimension values can be tied to groups of main accounts, or removed as required, or even interlinked so that one dimension’s value limits the possible values of another. Some examples will probably help to clarify here:

  • If a balance sheet account doesn’t require any dimensions, the user won’t even have the option of entering any. If the offset account does have dimensions, rather than being copied over these will be wiped automatically.
  • If a revenue-based dimension (sales area, revenue stream, agent, etc.) is only applicable when posting to revenue accounts, the dimension won’t be visible if a non-revenue account is selected in a journal.
  • If there’s both Department and Worker dimensions, and the Finance department is selected as the value for the Department dimension, only workers in the Finance department can be selected for the Worker dimension value.

As you’ve probably gathered, there’s a vast array of possible configurations allowing financial process owners to really fine-tune how AX handles their dimensions and dimension values. This is all handled through the account structures interface within AX; as such, there’s no need for developer input and all initial setup and subsequent updates to these rules can be performed by the business itself.

As well as the delimiting functionality we’ve already discussed, it’s possible to add enhanced controls on particular dimension values. For example, activation and deactivation dates can be entered, so that dimensions are only usable between those dates. Dimension value balancing is also possible, so that AX enforces the fact that postings against a particular dimension value must balance to zero. You can even set up ‘sum’ dimensions, so that selecting a header dimension in a report or financial statement will provide the totals for all sub-dimensions.

The end result of all this is that when a user comes to enter a main account – say, in a journal, on a sales order or when registering a purchase invoice – the dimensions the user is asked to fill in are calculated at that point and not before. AX checks the above configuration, determines which dimensions are required in that instance, and provides the user with a drop-down of the applicable values for the context. The benefits of this system can’t be underestimated; making it impossible for users to enter invalid combinations, and being able to update those combinations on demand, allows for a thoroughly clean financial data set for all operational and reporting purposes.

Of course, sometimes there are reasons for not sharing everything – consolidation entities, for example, often require different charts of accounts and dimensionality than their subsidiaries (whether for logistical or statutory reasons). Microsoft Dynamics AX 2012 allows an accounting manager to map subsidiary main accounts and subsidiary dimensions to a consolidation company’s own accounting structure, allowing seamless real-time consolidations.

In the next article I’ll be going through the day-to-day use of dimensions: how users interact with dimension fields when entering data into AX, as well as the options for pre-population of dimension values for easy time savings.

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