9 Financial Management
The primary responsibility of finance and accounting is to control and to analyze
the transactions that change the financial value in any area of the enterprise. These
transactions are generated in business processes all over the organization.
Finance management is the core area of business management solutions. In
Dynamics 365, there is a deep integration of finance with all business processes. As
a result, accurate financial figures are immediately available all the time.
9.1 Business Processes in Finance
Before we start to go into details, the lines below give an overview of the business
processes in finance.
9.1.1 Basic Approach
The core task of finance and accounting is to manage the general ledger with its
accounts, which is the basis for the balance sheet and the income statement (profit
and loss statement). Apart from the general ledger, there are subledgers – e.g.,
accounts receivable, accounts payable, fixed assets, projects, and inventory. These
subledgers contain detailed data for the related transactions in the general ledger.
Inventory management, for example, includes the inventory transactions which
reflect the details of changes for the stock accounts in the general ledger.
Whenever you post a subledger transaction that has got a financial impact (e.g., an
invoice in sales, or a counting difference in inventory), there is a transaction in the
general ledger. If you post a sales order invoice that includes a stocked item, there
are transactions in, at least, the following ledgers:
Inventory – Financial value (in the transaction and the on-hand quantity).
Accounts receivable – Customer debt (customer transaction).
General ledger – Stock account, revenue account, COGS account (cost of goods
sold), customer summary account.
The ledger integration is one of the core characteristics of Dynamics 365. It
provides traceability of all financial vouchers back to the origin in other modules.
Depending on the settings for subledger batch transfer in the General ledger
parameters, subledger transactions are immediately posted to the general ledger.
For processing transactions in Dynamics 365, the voucher principle applies: In all
areas of the application, you have to register a voucher before you can post it. After
posting, it is not possible to modify a voucher anymore. If you want to cancel a
transaction, you have to post a reversing transaction.
© Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023
A. Luszczak, Using Microsoft Dynamics 365 for Finance and Operations,
https://doi.org/10.1007/978-3-658-40453-6_9
394 9 Financial Management
9.1.2 At a Glance: Ledger Journal Transactions
In order to record a manual ledger transaction in Dynamics 365, you use a journal.
The lines below show how to post a single-line transaction in a general journal.
In the General journal list page (General ledger> Journal entries> General journals),
which shows all open journals that are not posted yet, click the button New to
create a new journal header. Alternatively, you can open the workspace General
journal processing and create a journal header with the tile New journal there.
In the next step, select a journal name for the new journal in the column Name of
the Journal list page and optionally enter a text that explains the transaction in the
column Description. If the transaction is subject to sales tax or VAT, the slider
Amounts include sales tax on the tab Setup of the journal header controls whether the
debit (or credit) amount in the journal lines includes tax.
In order to switch to the journal lines, click the button Lines in the action pane (or
click on the Journal batch number shown as a link in the grid of the list page). In a
transaction that does not refer to subledgers, leave the default option “Ledger” in
the column Account type of the journal lines and select the account number with the
financial dimensions in the column Account (using segmented entry control). If you
want to post to a subledger, select the respective Account type instead of the type
“Ledger” and enter the related account number in the column Account – for
example, the vendor number in a line with the Account type “Vendor”.
Figure 9-1: Registering a journal line in a general journal
In a single-line transaction, you can enter the account and the offset account
(including applicable financial dimensions) in the one common journal line. Once
you have completed the line, post the journal with the button Post in the action
pane of the journal header or lines.
