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Microsoft Dynamics 365 Business Central: Why and How to Use G/L Budgets

This post is about G/L (General Ledger) Budgets in Microsoft Dynamics 365 Business Central (D365BC). In particular, the post explores why G/L Budgets are useful and how exactly they can be set, used, updated and otherwise maintained.

First of all, it is worth mentioning that there are different Budgets in D365BC. For example, it is possible to create Budgets for Jobs (projects), Cost Budgets, etc. This post focuses on G/L Budgets as, perhaps, the most frequently used type of Budgets in the system. Such Budgets can be used, for example, to plan various expenses, revenue, etc. G/L Budgets can be created by department (e.g. expenses by department by month), product line and so on based on the Dimensions set up in the Company. Budgets can be set up for different legal entities (Companies). The budgeting periods can be months, quarters, years, etc. Moreover, it is possible to create multiple G/L Budgets within the same Company for the same period of time. This, for instance can be useful if multiple people work on G/L Budgets based on different departments, if multiple versions of the Budget need to be created (e.g. to be presented to the team) and in many other scenarios.

In order to be able to create and use G/L Budgets in D365BC, the following areas of the system must be already set up:

  1. the Chart of Account (COA) – the G/L Accounts that are going to be used in the budgeting process;
  2. the Dimensions that the G/L Budget is going to rely on.

In order to create a G/L Budget, search for the corresponding option in the system Search Box. Once on this Page, choose β€œ+ New” and fill out the β€œName” and β€œDescription” Fields and the Dimensions that are going to be used in this Budget:

GL-Budgets

To get down to the Budget details, select the β€œProcess” choice in the Ribbon and press the β€œEdit Budget” button. The next step is to attend to the β€œGeneral” and β€œFilters” FastTabs as explained on the screenshot below:

In order to Export a G/L Budget to Excel or to import it from Excel, users need to select the β€œBudget” choice in the Ribbon and press the β€œExport to Excel” or β€œImport from Excel” buttons correspondingly. This feature can streamline the process of creating a G/L Budget as users can rely on Excel for formulas, text editing, etc.

  • TIP: It is usually a good idea to, at least, start setting up a G/L Budget in the system and only then to export it to Excel for further work. This is going to show how exactly the system structures the data in Excel so that Users can continue following that structure to successfully import it back to the system.

Once a G/L Budget has been created, it can be used for reporting to compare the Budget to the actuals. It is important to note that G/L Budgets can be created at any point of time (e.g. before any actuals are available, while they are being recorded in the system or after they have already been generated) and still be used as intended and without any issues in D365BC. In order to start using a G/L Budget in a report, navigate to the β€œAccount Schedules” Page, select the desired Account Schedule, and press the β€œOverview” button in the Ribbon. Once on the β€œOverview” Page, the G/L Budget can be selected on the β€œDimension Filter” FastTab as shown on the screenshot below.

  • TIP: It necessary to ensure that the Account Schedule Report Columns (and Lines) are set up to show the Budget, the actual, the variance and other amounts appropriately.

Here’s a video tutorial of the above:

This article and the related video have explored why G/L Budgets are useful and how to use them in D365BC.

At KMicro, we help companies make informed, efficient, and effective decisions related to information technology, such as enterprise resource planning (ERP) software, to attain desired business objectives. Our consultants analyze business processes to refine, optimize and automate them. We empower organizations and their hard-working teams to save time and money while increasing their positive impact on the world, whatever industry they are in. If you would like to discuss how technology can help attain your business objectives, contact us.

Microsoft Dynamics 365 Business Central: Purchase Orders vs Purchase Invoices

This post is about the key differences between Purchase Orders (POs) and Purchase Invoices (PIs) in Microsoft Dynamics 365 Business Central (D365BC). Although the discussion focuses on POs and PIs, similar principles are applicable to Sales Orders and Sales Invoices in the system. Which one to choose? How easy it is to use one vs the other? Why one is preferable over the other in some cases. These and other questions are answered in this post.

Before diving into the topic details, it is useful to define a PO and a PI in the context of D365BC:

  • A PO is a financial Document used to inform Vendors of the intended purchase of goods, services, assets, etc. Posting a PO usually results in two things: firstly, receiving goods and services (Posted Purchase Receipts) and secondly, recording the financial implications (Posted PI). These two do not have to happen simultaneously. For example, it is possible to receive goods and services on one date and to record the invoice from the vendor on a different date.
  • A PI is a financial Document used to record financial implications of accounts payable (AP) transaction OR to simultaneously record a receipt and the related financial implications – the keyword in the latter case is β€œsimultaneously” (unlike a PO).

So, what are the differences between the two and which one to use in any given situation, which one is easier? To begin with, it is worth mentioning that POs and PIs are about equally easy to use. However, there are some differences requiring that one needs to be used over the other:

  1. Partial receipts – as can be seen from the definitions above, if users need to be able to accommodate partial receipts (e.g. 21 chairs are ordered and are then received in increments of seven or so over a period of time), the PO functionality is the way to go as one PI can only be used to record one receipt which has to be invoiced at the same time.
  2. Purchase Order Document – if users need to issue a document (e.g. to print or create a PDF) to request goods or services from vendors, the PO functionality is built for the purpose – multiple PO design formats are available out-of-the-box and can be easily modified even further. PIs can be printed (or exported to PDF) too, but they are going to read β€œPurchase Invoice” which may bewilder some vendors; moreover, the print format of PIs is likely usually requires a substantial redesign to be suitable for external stakeholders meaning more development and consulting hours if PIs are used.
  3. Prepayments – there are situations when vendors require a prepayment (in full or partially). On the accounting side, the prepayment money should be posted to an asset G/L Account till the vendor’s invoice(s) are fully processed, at which point the money moves from the asset Account to other corresponding G/L Accounts. If this is the case, the PO functionality should be chosen as it fully accommodates and automates the process, unlike the PI functionality that lacks the Prepayment feature.
  4. Converting from a Purchase Quote (PQ) – companies using the PQ functionality will find that it can be only converted to a PO which only then results in a PI which effectively means that even if POs are not necessary, users still have to come through the PO step if they convert from a PQ.
  5. Blanket POs – in some industries, it is common to use Blanket POs which, again, immediately can only be converted to a PO.

The list above does not exhaust all the differences between POs and PIs, but focuses on the key ones to help users make an informed decision that is efficient and effective when it comes to purchasing Documents. It should be noted that both POs and PIs can be used by users within the same company, depending on what they need to process – it does not have to be one or the other. For example, it is possible to choose POs for receiving inventory (where partial receipts are expected) and PIs for recording simple transactions, such as utility bills.

In summary, this post has focused on the key differences between PO and PI functionality in D365BC. It has defined a PO and a PI in the system and has discussed when a PO is usually preferable over a PI. It has also been pointed out that both POs and PIs can be used within the same Company for different purposes.

Here’s a video tutorial of the above:

At KMicro, we help companies make informed, efficient, and effective decisions related to information technology, such as enterprise resource planning (ERP) software, to attain desired business objectives. Our consultants analyze business processes to refine, optimize and automate them. We empower organizations and their hard-working teams to save time and money while increasing their positive impact on the world, whatever industry they are in. If you would like to discuss how technology can help attain your business objectives, contact us.

Microsoft Dynamics 365 Business Central: Why Purchase Quotes Are Useful

This post is about Purchase Quotes (PQs) in Microsoft Dynamics 365 Business Central (D365BC). In particular, the post explores the rationale and the benefits that PQs bring about and which are sometimes overlooked by companies using D365BC.

First of all, what is a PQ in D365BC?

  • A PQ is the financial Document used as an optional initial step in creating a Purchase Order (PO).

As can be seen from the definition above, PQ is not mandatory in the purchasing process, however, deploying them in some contexts is useful. Below are the key reasons why some companies may find it helpful to use PQs.

  1. Draft PO – some organizations have important processes structured around their POs. For example, the purchasing department may require the creation of draft POs that can be created in great quantities, including by junior team members, easily reviewed and modified before converting to actual POs. A function that fits the need best is the PQ.
  2. Approvals – out-of-the-box approval Workflows in D365BC only allow approving a PO before it is posted, but NOT before it is printed (or, by extension, sent to a Vendor, including as a PDF file). Therefore, companies wishing to get an approval process in place BEFORE a PO is printed have two key options: use PQs OR create a custom approval (e.g. via an Extension or Power Automate). The approval Workflow involving PQs is a no-code user-friendly process and is, therefore, usually preferred. Therefore, companies wishing to approve POs before they are sent to Vendors use PQs.
  3. Team Member license – another advantage of using PQs is the ability to save on license costs. What if a company (e.g. in professional services) has field workers who need to a) be able to use Time Sheets and b) initiate/request a purchase (e.g. to order parts)? The first requirement can be satisfied by the affordable Team Member license, but what about the second one? Only Users with a full (Essentials or Premium) license can generate POs. Interestingly, the solution to this can be PQs as the Team Member licensees can create PQs (which can be converted to POs). At the time of writing this article, the monthly price of an Essential license was $70 USD vs $8 USD for a Team Member license. Thus, a company that has 25 field workers can save $18,600.00 USD per year (($70.00 – $8.00) * 12 months * 25 Users) using PQs; if the company relies on Premium licenses ($100.00 USD per month), the savings are going to be $27.600.00 USD per year (($100.00 – $8.00) * 12 months * 25 Users).
    .

The list above does not exhaust all the different reasons why companies may choose to use PQs, but focuses on the key ones which are, perhaps, most popular. These help optimize the system, enhance the approval process and save on license costs.

Here’s a video tutorial of the above:

At KMicro, we help companies make informed, efficient, and effective decisions related to information technology, such as enterprise resource planning (ERP) software, to attain desired business objectives. Our consultants analyze business processes to refine, optimize and automate them. We empower organizations and their hard-working teams to save time and money while increasing their positive impact on the world, whatever industry they are in. If you would like to discuss how technology can help attain your business objectives, contact us.