Microsoft Dynamics 365 Finance: Learn about the modules that will provide you with a complete command of your financial matters.

Microsoft Dynamics 365 Finance: Learn about the modules that will provide you with a complete command of your financial matters.

Dynamics 365 Finance has been developed to support the multi-company and multi-currency operations of an organization, enabling real-time monitoring of its business performance. Dynamics 365 Finance has the ability to forecast future results and make data-driven decisions to stimulate the growth of the organization, regardless of its size or industry.

General accounting

It is used to define and manage the financial records of a legal entity. It involves a record of debit and credit entries classified through accounts numbered in a chart of accounts.
Use case: An organization employs Finance to modernize its financial and accounting system. The General Ledger module is the first stage of the process. It starts with setting up the fiscal year, followed by creating the chart of accounts and main accounts. The dimensions, dimension groups and accounting structures are defined below. Finally, the accounting book is configured, linking the fiscal year, chart of accounts, and accounting structure. During the configuration of the accounting book, the default currency and exchange rate are also set. All accounting transactions are governed by the configuration implemented in the accounting book.

Customer management

gestión de clientes
It refers to the balance of funds pending for products or services delivered and invoiced to a customer The total value of customer balances is reflected in the balance sheet as current assets. Customer management is used to monitor all invoices issued to customers and payments received. You can generate invoices based on sales orders or deliveries made. If the invoices are not linked to sales orders, you can also create service invoices. Payments can be received through various methods, such as promissory notes, cash, checks, credit cards, and electronic payments.
In the usage process, it is necessary to record all transactions related to customers in the general ledger, including issued invoices and product returns. The module allows for reconciling payments with the corresponding transactions. Additionally, it supports various payment methods, payment terms, prompt payment discount policies, payment terms, and calendars.

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Vendor management

The total value of outstanding balances with suppliers is recorded on the balance sheet as liabilities. You can manually input supplier invoices or import them electronically through integration services. Once invoices are inputted or received, they can be reviewed and approved through an invoice approval log. The system can enable invoice reconciliation, guidelines for processing supplier invoices, and workflows to automate the review process. Invoices that meet specific criteria are automatically approved, while others are designated for review.
During the usage process, all transactions related to suppliers, such as supplier invoices and customer product returns, need to be recorded in the accounting ledger. The system allows for the settlement of payments related to these transactions. It also supports various payment methods like checks and electronic payments, payment terms, early payment discount policies, payment terms, and schedules.

Budget management

The budget module in Dynamics 365 is divided into three main sections: budget planning, budget input, and budget control. Budget planning ensures compliance with the organization’s policies, procedures, and requirements when implementing the budget. With budget input, you can record budget items in Finance and allocate them to accounting accounts. Budget control is an optional step to validate financial transactions in Finance according to the registered budget lines.
Use case: You are the financial controller of an organization. You use Finance to carry out long-term strategic planning and annual budget planning, ensuring that financial transactions align with the organization’s hierarchical structure. You can configure budget allocation for main accounts and dimensions defined in the organization’s chart of accounts. You can also apply budget controls to transactions based on the established budget, adjusting it to the appropriate level of control according to the organization’s culture and maturity.

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Cash and Bank Management

This module covers financial instruments such as deposits, checks, bills of exchange, and promissory notes. It also allows bank statement reconciliation and generates standard reports related to banking operations.
Use case: You can manage your organization’s bank accounts and carry out all necessary banking transactions. If you need to reconcile bank statements with your accounting records, Finance allows you to import and automatically reconcile bank statements with corresponding transactions. Additionally, within this module, you can perform cash flow forecasting, using customer and supplier data alongside payment conditions to estimate your organization’s cash needs.

Fixed Assets

It provides access to resources used by Finance in relation to fixed assets. Fixed assets are valuable possessions owned by an individual or organization, such as buildings, vehicles, land, and equipment.
Use case: Organizations utilize various types of fixed assets to conduct their operations. These can be tangible, such as properties, equipment, and inventories, used in the production of goods and services. There are also intangible assets, such as copyrights, trademarks, and brand value, which lack physical existence but represent financial value. In the fixed assets module, you manage asset profiles that include purchase details, current valuation, and depreciation scheduling.

Expense Management

gestión de gastos
This module facilitates creating an integrated workflow to store payment method information, import credit card transactions, and track employee expenses. It also allows defining expense policies and automating the reimbursement of travel expenses.
Use case: Imagine you’re the regional operations director of a multinational company spanning four countries with different legal entities. You use a cost center to oversee operations in these countries. With the Expense Management module, you can define all these expense policies based on the hierarchical organizational structure. For instance, when an employee logs expenses, these are automatically adjusted to adhere to the established policies. Additionally, it’s possible to record expenses related to different legal entities when an employee works on a project of another legal entity, necessitating the recording of expenses for that project.

Asset leasing

The Asset Leasing module in Finance offers advanced capabilities to monitor, track, and automate financial transactions related to leased assets. This includes capturing and processing lease data, generating accounting entries throughout the lease lifecycle from initial recognition to monthly movements, depreciation, and lease termination.
Use case: Suppose your company has expansion plans and is considering leasing furniture instead of purchasing it. The asset leasing process encompasses transactions such as lease agreements, lease calculations, and related accounting entries, which are recorded in the ledger according to defined recording policies. With Finance, the company can manage this process along with lease details like payment terms, start and end dates, payment frequency, and lease amortization.

Revenue Recognition

In companies selling various types of products or services, it’s necessary to break down orders with multiple elements to recognize revenue based on specific company and industry guidelines. The revenue recognition process is divided into two main tasks: revenue allocation and revenue deferral. Revenue allocation ensures the proper recognition of revenue price based on the value of components within orders with multiple elements. Revenue deferral refers to recognizing revenue over time, based on the contractual term and defined percentages.
Use case: If you work as an accountant in an organization that sells products and services, you’ll encounter situations where you need to recognize revenue in a deferred manner. For instance, if a sales manager sells a TV with installation and an annual maintenance contract, the revenue from the installation will be recognized the following month, when the installation takes place. As for the revenue from the maintenance contract, one-twelfth of the total will be recognized each month until the following yea

Credit and Collections Management

Gestión de crédito y cobros
This module helps manage credit limits and controls the flow of sales orders according to established credit policies. The Collections Management page provides a centralized view of customer collection information. The Customers module establishes the calendar and payment terms that govern the collections generation process. Additionally, you can generate collection reminders based on the defined calendar and, if necessary, apply interest for overdue payments.
Use case: If you’re part of a sales organization, your responsibility is to manage customer relationships and generate sales orders. The Credit Management module allows you to assess customer suitability based on their credit rating. Collections managers use the centralized view to handle collections, and collections agents can initiate the collection process using customer lists generated based on predefined collection criteria or from the Customers page.

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