General Ledger

Dynamics 365 Business Central – A closer look at Registers in Business Central

Gavin WhittakerLeave a comment

When you post transactions in Business Central, as well as creating all the necessary entries in the system, various registers are also created which link the entries together.

These registers offer a valuable insight into how the system is working and are also a great tool to use when you want to track a transaction through the system.

I often find that registers don’t get the recognition they deserve with some users unaware of their existence.

In this post, we’ll shine a well deserved light on registers and explore why they are such a valuable feature in Business Central.

What is a Register

When you post transactions in Business Central, depending on the nature and type of the transaction, one or more registers are created.

For instance, posting a General Journal that solely impacts G/L accounts, results in the creation of “General Ledger Entries” and a “G/L Register”. (stay tuned for details of other registers the system can create 😊)

This “G/L Register” will have a record of all the entries involved in that journal.

For example, below is a manual depreciation journal entered via the “General Journal” page.

When I post this as well as the “General Ledger Entries”, I also get the G/L Register below.

As you can see the register is offering lots of very useful information. Its telling me who posted the transaction, when the transaction was posted, what batch was used, which module it originated in (via the Source Code), and the entry numbers created (“From Entry No” and “To Entry No” columns). Importantly, it also has a sequential number that is created by the system and can’t be changed. This offers a really good audit of the transactions moving through the system.

Navigate a Register

Now, by using the navigation options on the toolbar of the “G/L Register” page, I can explore the related entries for that G/L Register. For instance, as shown below, clicking the “General Ledger” button prompts the system to open the “General Ledger Entries” page, automatically filtered to the entry range specified in the G/L register (in this case, entries 3740 to 3741).

If you were to post a Sales Invoice, that has GL accounts on it, you would then get “General Ledger Entries” and “Customer Ledger Entries”. Therefore you would be able to navigate to the “Customer Ledger Entries” from the resulting “G/L Register” as well as the “General Ledger Entries”.

For example, I’ve now posted a Sales Invoice which has created a new G/L Register. From this register I can click “Customer Ledger” and “General Ledger” to view the relevant entries.

More Registers

So far, we’ve only just begun to explore registers 😊.

This time, let’s say we have a Sales Invoice that includes Inventory Items. In this case, we’ll get a “G/L Register” for the Customer and General Ledger Entries, but we’ll also get an “Item Register” for the entries related to the items.

The “Item Register” connects the “Item Ledger Entries” and the “Value Entries”. It serves as a useful record of how items are moving through the Inventory module.

For instance, I’ve posted a Sales Invoice for 5 Inventory Items, and below you can see the resulting “Item Register”. From this Item Register, I can view the associated Item Ledger Entries and Value Entries.

If we take things a step further, and I’d had been using a Location that has warehouse activities configured we’d have “Warehouse Entries” created and a “Warehouse Register” to keep track of activity in the warehouse 😊.

For example, I’ve now posted a Sales Invoice that generated movement in the warehouse through “Warehouse Entries”, resulting in the creation of a “Warehouse Register”. I can visit the “Warehouse Register” page to view this, alongside all other warehouse activities. By navigating to the Warehouse Entries, I can see the specific movement from the Bin.

Other registers

So what other registers do we have. You can see a list by searching “Register” in the Tell Me option but the common ones I use are as follows

  • G/L Register
  • Item Register
  • Warehouse Register
  • Fixed Assets Register
  • Project Register

Tip – Filtering Registers

As a final note, being a functional consultant, I find the “Source Code” field especially useful as it enables me to filter and track when specific routines have been run, such as the closure of VAT entries or the posting of the Adjust Exchange Rates process.

To do this, you simply apply a filter on the relevant “Source Code”. In the example below, I’ve filtered on the Source Code “VATSTMT” to check when the VAT was closed.

I must confess, during training and testing, I also use it to check how often users have been posting in the system 😊.

Conclusion

This post goes through how registers work in Business Central and just how useful they can be. They not only provide an audit from a financial perspective but also offer a glimpse into how the system is working with the various entries.

Thanks for reading!

Dynamics 365 Business Central – Walkthrough of GL Consolidation with Different Currency Business Units

Gavin Whittaker1 Comment

Introduction

Business Central provides functionality to consolidate companies, enabling reporting at a group level. This consolidation feature also supports combining companies that operate with different local currencies.

In this post, we’ll explore how consolidation works when integrating one company that uses the same local currency as the consolidation company, and another company that uses a different local currency.

We’ll cover various setup aspects, including General Ledger (GL) code configurations in both companies. Then, we’ll consolidate transactions over two months and review the resulting GL entries.

It’s important to note that in my configuration, all companies share the same chart of accounts. In reality, this is often not the case, so we’ll also discuss how to map GL accounts from source companies to the consolidation company.

My Configuration

To walkthough this, I’ve created two trading companies in Business Central, both based on the Cronus demo data.

One company is a UK-based entity called “Cronus UK Company,” which uses GBP as its local currency (set in the General Ledger Setup page). 

The other company is called “Cronus EURO Company,” and it uses Euros as its local currency.

** Both companies are created using evaluation data in the same way. I’ve just changed the currency in the General Ledger Setup

Finally, I’ve been through the assisted setup to create a “Consolidation Company” that I’ll be consolidating the data from both companies into.

**The purpose of the post to look at the multi currency aspect of the consolidation so I won’t be going through this part, however its a fairly simple wizard to follow 😊

This has created me the following Consolidation Company, which is also GBP, adding both my trading companies as “Business Units”. (for more information on setting up a Consolidation Company see this link)

Chart of Account Configuration

Before we run the consolidation there are a couple of setting on the Chart of Accounts I want to focus on in each trading entity which are shown below:

With regards the “Consol Debit Acc.” and “Consol Credit Acc.“, these fields are used if you want to consolidate the balance in a General Ledger (GL) account to a different account in the consolidation company. Since all my companies use the same Chart of Accounts, as mentioned in the introduction, I will leave these fields blank so that the balances consolidate into the same GL accounts.

For the “Consol Translation Method“, if the company you are consolidating operates in a different currency than the consolidation company, it’s necessary to set a translation method. I will use “Average Rate (Manual)” for my Income Statement accounts and “Closing Rate” for my Balance Sheet accounts.

There are other translation method you can use which can be found here however in my experience Average Rate is typically used for Income Statement to smooth out rate differences over a period and closing rate is used for balance sheet to reflect the value at the end of the reporting period

Business Unit Configuration in the Consolidation Company

Now that we have configured the Chart of Accounts in each company, let’s take a closer look at the Business Units that have been set up in the Consolidated company using the Assisted Setup.

You can add these manually via the “Business Units” page in the consolidation company if you choose to setup the Consolidation company manually.

The Cronus UK company business unit configuration is below:

The Cronus EURO company business unit configuration is below.

Test Transactions

In each trading entity I’ve posted a series of General Journals to create the following General Ledger Entries

Cronus EURO Company: The GL account 10110 is an Income Statement Account and therefore is going to be consolidated with an Average Rare and the GL account 62110 is a Balance Sheet Account which is going to be consolidated using a Closing Rate. (more on how we set the rates when consolidating below)

Cronus UK Company :- As per above he GL account 10110 is an Income Statement Account and the GL account 62110 is a Balance Sheet Account. (rates are irrelevant for this company as its the same currency as the consolidation company)

Run Consolidation

Now we have configured the Chart of Accounts, the Business Units, and posted some transactions, we can run the consolidation and then review the resulting General Ledger Entries.

To do this we’ll need to go to the “Business Unit” page and click “Consolidate”

Next I enter the dates I want to consolidate, fill out the Document No, and click Next. (in this case I’m consolidating January first)

Then I tick the companies I wish to Consolidate and click “Next”

Now I’ll set the Average and Closing Rates for the EURO company. (the system will suggest a rate as well however I’m going to overtype this). To do this drill back on the “Average Currency Factor” as per below

This opens the “Setup Business Unit Currencies” page, where I can adjust the “Average” and “Closing” rates and then click OK. (I have used rates of 1.5 and 2 to simplify the calculations when we review the General Ledger Entries.)

** Therefore the balances on account 10110 will use a rate of 1.5 and the balances on account 62110 will use a rate of 2

Now this has all been set we can click “Next” and “Finish” to complete the Consolidation.

The Consolidation Entries

Now we have consolidated let’s have a look at the “General Ledger Entries” that have been produced by the consolidation process. (click to enlarge)

As you can see, the GBP_CO business unit has consolidated all the transactions exactly as expected with no adjustments.

However as we had different rates for Income Statement (Average) and Balance Sheet (Closing) we have an additional entry thats been post automatically. This is to balance the consolidation as we are using different rates.

This also shows nicely on the G/L Register, as a G/L register is created for each Business Unit that is consolidated

Here you can see the General Ledger Entries for the EURO_CO business unit

Consolidation for the next month

Let’s see what happens when we consolidate the next month using different rates again.

Enter the new Rates:

And then Consoldiate

Now let’s look at the General Ledger Entries (click to enlarge)

One important point here is we needed to leave the “Last Closing Rate” at 2 as the system first posted an adjustment recalculating the balance of the Balance Sheet account for the EURO_CO business unit to match the new rate of 1.75. (this is shown in point 2 in the screen shot above). This ensures the balance at the end of February reflects the Balance Sheet transactions at a “Closing Rate” of 1.75. i.e.

Prior to the February consolidation, the balance of the balance sheet account (62110) for the EURO_CO business unit was £50. The system then used the “Last Closing Rate” to calculate this equates to €100 using the “Last Closing Rate” of 2. It then calculated the GBP at the new “Closing Rate” of 1.75 as £57.14 (€100/1.75=£57.14). Therefore as the GBP balance was £50.00 an adjustment was posted for £7.14 (point 4 on the screen shot above)

Conclusion

This post walks through a consolidation process that involves business units with different currencies showing the different posting and adjustments that are made when using different translation methods.

Thanks for reading!

Dynamics 365 Business Central – Exploring the Different Options when running the “Close Income Statement” Routine

Gavin WhittakerLeave a comment

Introduction

In this post, we’ll explore the various options available when running the “Close Income Statement” routine in Business Central, and we’ll also look at the outcomes of running each option.

This routine is used to close the income statement General Ledger accounts and transfer the balances to the retained earnings account as part of the General Ledger year end routine.

Depending on your needs, Business Central offers several ways to customise how these accounts are closed, and in this post, we’ll walk through each of these options, showing the results when the routine is run using the different settings.

Please note this post assumes you have followed any year end processes such as ensuring all General Ledger accounts are correctly set as either Income Statement or Balance Sheet and the Financial Year has been closed via the “Accounting Periods” page.

Option 1 – Post to Retained Earnings in Summary with no Dimensions

With option 1 we select the following options in the “Close Income Statement” page

  1. Post to Retained Earnings Acc. = Balance
  2. Dimensions = None Selected

Using the options above the system closes each income statement at GL account level, without any breakdown by dimension. Therefore is I were to have multiple postings to an income statement GL account, and each posting had different dimension analysis, I’d just get one entry in my closing journal for the total balance of the income statement account, rather than a posting per dimension combination.

Additionally, as we have selected “Balance”, the system will make a single entry to the retained earnings account, consolidating all income and expense balances into one summarised posting.

The outcome of using these options in my demo data is shown below.

Option 2 – Post in Detail to the Retained Earnings but no Dimension Analysis

With option 2 we select the following options in the “Close Income Statement” page

  1. Post to Retained Earnings Acc. = Detail
  2. Dimensions = None Selected

When you run the “Close Income Statement” process in Business Central and select “Detail” rather than “Balance,” the system posts an entry to the Retained Earnings account for each individual income statement GL account its closing. I’ll therefore get multiple entries (“Detail”) to the retained earnings account rather than a “Balance”.

However, as I’ve still not selected “Dimension”, I’d still only get one posting per income statement account, regardless of any dimension postings.

The outcome of using these options in my demo data is shown below.

To highlight the additional “detail” posting to the Retained Earnings account, if I preview post this journal I can see the 5 posting to the Retained Earnings account rather than one entry.

Option 3 – Post in Summary to Retained Earnings and close by Dimension

With option 3 we select the following options in the “Close Income Statement” page

  1. Post to Retained Earnings Acc. = Summary
  2. Dimensions = All Selected

With “Balance” and dimensions enabled as per the above screen shot, we are now back to posting a summarised entry to retained earnings account, however we will now have breakdown of the GL posting by dimension for each income statement, creating separate entries per dimension.

The outcome of using these options in my demo data is shown below.

There are now multiple entries to the GL accounts per dimension combination all balanced to one entry to the Retained Earnings account

Option 4 – Post in Detail to Retained Earnings and close by Dimension

With option 4 we select the following options in the “Close Income Statement” page

  1. Post to Retained Earnings Acc. = Detail
  2. Dimensions = All Selected

The final option we’ll look at when running the “Close Income Statement” process is to select “Detail” and tick “Dimension” as per the screen show above.

Having these options selected will post a separate entry to the retained earnings account for each income statement GL account (Detail) and further breaks down for each entry by dimension. (as we have ticked the Dimensions). This provides the highest level of detail.

The outcome of using these options in my demo data is shown below.

Conclusion

As we can see the “Close Income Statement” routine in Business Central offers several options to customise how income statement balances are posted to retained earnings.

Whether you choose to post a single summarised entry to the Retained Earnings account, or want more detailed posting, each method allows for different levels of analysis and reporting.

Thanks for reading!