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BUSINESS CENTRAL

Understanding Consolidations in Business Central for Multi-Company Reporting
29
Jun

Understanding Consolidations in Business Central for Multi-Company Reporting 

For businesses that have their operations in several subsidiaries, divisions, or separate legal entities, it is no secret that one of the issues faced when the accounting period comes to an end is consolidation. It takes up valuable time and leaves much room for mistakes when trying to aggregate all the spreadsheets manually into a consolidated report.  Microsoft Dynamics 365 Business Central makes this process easier by providing native consolidation. In other words, instead of depending on third-party systems or working with Excel-based solutions. You can consolidate your accounting data right inside the system you already use. Here we will consider the consolidation process in more detail.  The Key Element: Business Units  “Business Units” is the key element of the consolidation process in the Business Central software. This refers to the branches or subsidiary companies that one plans to consolidate under the parent company. If one does not plan to have several databases, then he can create them in Business Central.  After creating the units, one will be able to get data from each unit whether they come from the same database or from another business central environment and bring them in the G/L entries of the consolidated company.  Dealing with Complexity: Currencies and Chart of Accounts  Among the most difficult aspects in multi-entity consolidation, currencies and differences in Chart of Accounts are two major concerns.  Business Central automatically handles currency conversion. You specify your consolidation rules and the currencies you need. The software will automatically convert the amounts from the subsidiary using exchange rates you specified. Resulting in a proper valuation of your consolidated balance sheet in your currency.  Also, subsidiaries might use an alternative numbering in their Chart of Accounts. Business Central Consolidation Charts of Accounts tab solves this issue. For instance, the “Office Supplies” account may have number 5000 in the subsidiary while in the parent company, its equivalent “General Admin” has number 6000. In such a case, a link ensures that all the money would go to the right account despite its source in another organization.  The Critical Step: Eliminations  The total amount of balances in all sub-ledger accounts will not amount to a consolidated financial statement because there exist intercompany transactions. For instance, when one company in the group sells its products to another company in the group, the sales proceeds are intercompany transaction proceeds that must be eliminated.  In Business Central, elimination is done through the Eliminations process. Financial professionals can make elimination entries depending on certain percentages or dimensions that have been set. The eliminations are made through postings to eliminate the payables, receivables, and revenues resulting from intercompany transactions. Some elimination entries may not be automatically posted, although the system provides the means of posting them manually.  Real-Time Reporting & Analysis  The best possible advantage of applying Business Central as an aid in performing consolidations is the ability to gain real-time insight. The information generated by the process becomes immediately available in financial reports, covering all aspects of a corporation’s financial health. No more waiting of weeks for correct spreadsheet numbers; with the information standardized, analysis is almost immediate.  Conclusion  It goes without saying that the expansion of corporations brings about a higher need for efficient financial reporting processes. Spreadsheets are unable to satisfy the ever-growing demand of multi-company reporting, hence the need for consolidation capabilities, such as those of Business Central. Not only does it minimize the risk of mistakes; it also cuts down the period of the financial close cycle drastically.
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One Source of Truth: Understanding Consolidations in Business Central for Multi-Company Reporting
22
Jun

One Source of Truth: Understanding Consolidations in Business Central for Multi-Company Reporting 

As the size of businesses expands, they tend to become more complex entities with a range of subsidiaries, branches, and legal forms of existence. A business may start with one headquarters, only to acquire a distributor in another area or develop an entirely separate manufacturing branch. Although expansion is always an exciting process. It raises serious questions regarding the ability of the finance department to manage the finances of the whole business. The information spreads across different databases and currencies. Solve this problem by using the Consolidation in Microsoft Dynamics 365 Business Central.  Dealing with the “Spreadsheet Maze”  Prior to introducing an ERP system, most companies must resort to traditional methods to integrate their financial figures. In such instances, trial balances are normally exported to Excel from multiple sources. Also it gets adjusted for the differences in currencies before being combined into one document.  As an option, this method may work fine for very small companies. However, it is fraught with the danger of version control problems, wrong formulas, lack of security, etc. Moreover, this process takes much longer, and by the time information integrates, it is already out-of-date. This situation, causing executives to make decisions based on an outdated picture of things.  Business Central Consolidation Process  The following process simplifies the whole procedure by letting you combine all your subsidiaries’ data into one consolidated company regardless of the chart of account, fiscal year, or currency used by each individual subsidiary.  There are two key approaches to consolidations in Business Central:  Internal Consolidation: If all of your subsidiaries use Business Central, then this will allow you to automate the importing of subsidiary databases into the consolidated company.  External Import: In the case of subsidiaries that may be using other ERPs or legacy systems, Business Central lets you import information through XML or Excel ports.  Critical Characteristics of Correct Reporting  What truly sets the Consolidations module apart is its ability to address complexities involved in accounting both internationally and domestically:  Foreign Exchange: When dealing with foreign companies, exchanging them into a reporting currency (USD, EUR, and other) becomes an annoying issue. Business Central deals with this automatically by translating subsidiaries according to the pre-determined exchange rates.  Mapping of Charts of Accounts: In many cases, subsidiaries will have charts of accounts, which differ significantly from those of other subsidiaries and the parent company. Thus, when consolidating subsidiary companies, some accounts need to be mapped to a uniform set of accounts. Business central software makes it possible, and “Marketing expense,” which was originally designated as “Account 6000,” becomes “Account 8050,” etc.  Intercompany Elimination: Without a doubt, the most important characteristic of consolidation is the elimination of internal operations. Since the revenues that arise from them are, strictly speaking, fictitious. This operation can be performed easily with Business Central; the software automatically generates eliminations regarding inter-company payables, receivables, and revenues.  The Strategic Advantage  Using proper consolidation in Business Central elevates the function of finance from being purely tactical to something strategic. With the automation of the tedious task of aggregating data and translating currencies, finance executives can close their books more efficiently.  But most importantly, it gives you a “single version of the truth.” There will no longer be confusion on which Excel sheet is correct because you’ll have access to live and consolidated dashboards. Perhaps even through Power BI, to examine the profitability of the company, break it down to specific regions, and see trends that won’t be evident with fragmented data.  In today’s dynamic business environment, visibility is power. Get it with the help of Business Central’s consolidation capabilities. 
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Beyond the Balance Sheet: Managing Fixed Assets Efficiently with Business Central
15
Jun

Beyond the Balance Sheet: Managing Fixed Assets Efficiently with Business Central 

For many companies’ experiencing growth, it’s likely that fixed assets such as laptops, vehicles, machinery, and even property form an important part of their capital structure. Surprisingly enough, however, asset management in most cases remains a manual affair. Too many companies depend on spreadsheet systems for depreciations, location tracking, and maintenance scheduling something that results in mistakes, non-compliance, and an inability to get the full value of the business.  Business Central by Microsoft Dynamics 365 is a powerful tool for addressing such difficulties, providing integrated asset management within the context of an entire ERP system. In this way, it turns a cumbersome process into a productive one. Here’s how Business Central can assist with fixed asset management.  1. Centralized Data and Automation  The first thing that makes the use of Business Central worthwhile is the absence of silo systems. In this system, you do not need to have an extra ledger in Excel that needs to be reconciled with your ledger account monthly. Rather, when you purchase a new fixed asset, you fill out its “Fixed Asset Card” by putting down all pertinent information, including the value of the asset purchased and how it will be depreciated.  Once this is done, the automated process kicks in as you prepare journals that are set up to make calculations for depreciation on an automatic basis into your G/L account. This applies whether you apply a straight-line method, declining balance method, or customized depreciation method.  2. Complete Lifecycle Management  It’s not simply a matter of acquiring the asset, recording depreciation expense, and then forgetting about it; asset management includes management of the full lifecycle of that asset. With Business Central, you can do just that.  Asset Acquisition: Integrate seamlessly with Accounts Payable and easily convert a vendor invoice into a fixed asset record.  Maintenance: Monitor repair expenses and maintenance schedules. This will allow businesses to determine the total cost of owning the asset and choose either repairing the asset if it is old or replacing it.  Asset Disposal: In case of asset disposal, system record gain or loss automatically with proper accounting entries.  3. Insurance & Compliance Management  Usually business forgets insurance documentation until something goes wrong. With Business Central, users can document the insurance information and even specify insurance amounts for assets. Users will even be able to create reports on the total book value of their assets compared to their insured amount.  In addition, for businesses that are required to comply with regulations and laws on many different levels, users can maintain separate sets of books for tax purposes and internal use.  4. Real-Time Reporting and Analysis  Finally, Business Central helps transform data into information. Using real-time reporting, one can perform analysis regarding asset usage, depreciation costs, and net book value. The management can now use this information to make informed decisions in the context of capital budgeting. The software helps find out the underused assets for selling, and whether there is a need to buy a new equipment.  Conclusion  Today, being efficient has become crucial. Using manually prepared Excel sheets for fixed asset management cannot be justified anymore. With the help of Business Central by Microsoft Dynamics 365, one can ensure data accuracy, comply with relevant regulations. Also have a better insight into the portfolio of physical assets. The balance sheet is not enough anymore, and it is time to embrace technology. 
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Timing is Everything: How Deferrals Improve Revenue and Expense Recognition in Business Central
08
Jun

Timing is Everything: How Deferrals Improve Revenue and Expense Recognition in Business Central 

In the field of accounting, cash reigns supreme, while accuracy rules the roost. For most organizations, especially those involved in selling subscription models or maintenance plans. There can be a significant difference between when the cash comes in and when the task gets completed. You may get the revenue for an annual subscription plan in the month of January; however, the fact remains that you have not earned that income yet till December. Booking it all in the month of January would mean presenting financial statements that show rapid growth in January followed by stagnancy in the following ten months. That is why deferrals become very important, and Microsoft Dynamics 365 Business Central comes to the rescue here.  The Challenge of Matching  Matching is the heart of the accrual accounting system where the concept says that revenue should be accounted for when the related expenses have been incurred. Thus, if you make the sale of an annual software license, the income arising from that sale must be spread over the life of the license. On the other hand, payment of insurance premiums on a yearly basis should be expensed in monthly instalments.  Lack of a suitable deferral tool forces finance professionals to take recourse to cumbersome and risky manual processes involving spreadsheet-based calculations. The finance team will need to estimate the amount of recognition on a month-on-month basis. Followed by preparation of journal entries that will see funds transferred from a Balance Sheet Account like Unearned Revenue to the Profit and Loss Account.  Automation of the Process in Business Central  Through automation, Business Central makes the dependence on spreadsheets redundant by recognizing the income and expenses automatically. Create the “deferral templates,” to determine the way transactions recognition.  While creating the sales invoices and purchase invoices in Business Central, it becomes possible to assign deferral codes. At that moment, the income is recognized automatically, but it does not go into the Profit & Loss (P&L) straight away. Instead, most of the income goes to a deferral account on the Balance Sheet side. The accounting process then continues based on the plan that you have defined (monthly, quarterly, or yearly).  Eliminating Financial Uncertainty  What’s important about this feature is the visibility it brings. By postponing income and expenditures, you give a realistic representation of how your business functions to your investors.  Let’s take a manufacturer, who buys an expensive shipment of materials in one quarter for the whole year at once. This means that in Q1 there will be an immense drop in profits, which might scare off potential investors. Whereas quarters two, three, and four will look exceptionally profitable. By taking advantage of expense deferrals in Dynamics 365 Business Central, you distribute the cost equally, making profitability less variable and comparing figures monthly easy.  Compliance & Confidence  Aside from management convenience, expense deferrals make you compliant with standards like GAAP and IFRS. Come audit time, you won’t have to scramble looking for Excel sheets or calculations scattered across the board. You have all your data built into Business Central. Log every schedule and automatic post right back to its source.  Conclusion  Financial reporting involves not only making sure accounts balance but telling the real story of what goes on in your company. With an economy that depends on subscriptions and agreements that span for years, accurate accounting becomes an essential part of business processes.  With the help of deferred functionality in Business Central, one can leave the uncertainty of manual estimates behind. You will be able to make sure you recognize your expenses and income at the correct time. As a result, you can make the necessary decision and scale your busine
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From Click to Ship: How E-commerce Businesses Automate Orders with Business Central
25
May

From Click to Ship: How E-commerce Businesses Automate Orders with Business Central 

In the world of e-commerce today, speed and accuracy have become the key battlegrounds. Customers expect an Amazon-style experience: immediate order confirmation, quick delivery, and up-to-date inventory. For expanding e-commerce businesses, the largest hurdle that prevents growth may well be the Order Gap the gap between your customer’s shopping cart and your warehouse.  Today, many businesses still conduct their orders manually. Printing orders from a web-based portal, entering the order details into the accounting system, and sending the shipment data via email. Not only does this process take time, but it also sets the stage for inevitable human error.  Enter Microsoft Dynamics 365 Business Central. By seamlessly connecting your e-commerce storefront with your powerful ERP (Enterprise Resource Planning) system, you can completely automate your entire order-to-cash process. Here’s how top-tier e-commerce companies leverage Microsoft Dynamics 365 Business Central to transform manual madness into automated efficiency.  1. Seamless Order Integration Across Channels  Regardless of whether you’re selling your products on Shopify, Magento, WooCommerce, or even on third-party sellers such as Amazon or eBay. Keeping up with multiple sales channels by handling each channel separately can be extremely hectic. Business Central provides support through its pre-integrated connector as well as its integrating capabilities with all the above-named sales channels.  The moment a customer clicks on the “buy” button, the order does not sit and wait until an employee exports it into a CSV file. Instead, it flows directly into the Business Central system, eliminating the need for any manual data input at all.  2. Real-Time Stock Synchronization   The most frustrating thing for any customer is making an order and then receiving an email after a few days that the product he or she ordered is out of stock. This is due to inconsistencies between the inventory level on the online shop and that of the physical inventory in the warehouse.  Business Central solves this problem by serving as the “single source of truth” for inventory. When a customer makes an order, Business Central automatically reduces the inventory stock. This data is synced in real time to the webstore, making fewer stock levels available to other customers.  When the stock level rises in the warehouse, this information is immediately shared with the online shop through automation.  3. Automated Fulfilment and Shipping  After the order is placed in Business Central, the system will automate the physical process of fulfillment of the order. This means that you can create the list of items for picking by workers, or you can connect the Business Central with WMS to show where the item located within the warehouse.  However, even better is the shipping integration. The system works with UPS, FedEx, and DHL. After the order is packaged, the system will calculate the rates of the shipping, print the labels and pack slips with just one click.  The tracking number will be entered into the sales order automatically and will be forwarded to the customer via email.  4. Financial Automation and Reconciliation  The last missing link here is money. In the traditional setting, the accounting department would spend many hours reconciling payments received via payment gateways such as Stripe or PayPal against the invoices in their accounting software.  With Business Central, an automatic posting of the invoice occurs once the shipment of the order goes through. Thanks to the integration with the payment gateway, the transaction is automatically reconciled, thus providing business owners with an instant overview of their cashflow while saving significant time at the end of the month.  The Bottom Line  Automation is key to the success of any online retail operation nowadays. Using Microsoft Dynamics 365 Business Central as an example of software capable of automating orders, we see that by doing so, companies will save themselves from costly mistakes, keep track of inventory more effectively, and ship orders faster.  Creating a bridge between e-commerce businesses storefront and office operations will allow organizations to concentrate on the right things.
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The Distributor’s Edge: Why Microsoft Dynamics 365 Business Central Leads the ERP Market
18
May

The Distributor’s Edge: Why Microsoft Dynamics 365 Business Central Leads the ERP Market 

In the competitive environment that is wholesale distribution, the line between making profits and losses is a very thin one indeed. Today’s wholesaler operates under a business climate where margins are slim, the supply chain is unpredictable, and customer demands are always on the increase.  Wholesalers, therefore, have no choice but to adopt a more sophisticated ERP system. There may be many systems available in the marketplace, but the best is without doubt Microsoft Dynamics 365 Business Central. Here is how it is surpassing all competitors.  1. Effective Stock Control and Warehousing  In distribution, stock is money in the shelves. Poor stock control will lead to the death of the company. Business Central allows for extensive and detailed control over the stock, which is much more than mere counting.  It has sophisticated warehousing functions, such as bin control, pick/put-away operations, and guided pick/ship. Also it allows for various unit-of-measure conversions, and this means that no matter whether you purchase at pallets or sell at units, everything will tally up. It also uses smart forecasting to predict future demand from past sales. This helps minimize dead stock and avoid stockouts, which may lead to strained client relations.  2. The Strength of the Microsoft Ecosystem  The second very convincing advantage that makes BC the market leader is its easy integration with familiar applications used by company employees. There are many ERP systems out there, which seem to be alien to employees who need a lot of time to learn how to use it.  Business Central resembles familiar Office applications like Outlook and Excel. Users can see business information right in their email or manipulate financial information in Excel and automatically publish the data back into the ERP system. Integration with Power BI provides opportunities for creating impressive, up-to-date dashboards showing sales performance.  3. Flexibility and Scalability in the Cloud  Traditional legacy ERP applications tend to be both costly to own and tough to upgrade. Dynamics 365 Business Central is a cloud-based SaaS (Software as a Service) application. What this means is that the distributor will have the luxury to access all the information regardless of his location whether it be in the warehouse, meeting clients on-site, or even working remotely.  Another important characteristic of a good software is scalability. When an organization is growing, either through additional warehouse facilities or geographical expansions, the software must have the capacity to grow with the business, without incurring any hardware upgrades or costs.  4. Smooth Integration into the Supply Chain  A contemporary distributor is one link among many in a complex chain. One of the key advantages of Business Central is its seamless integration. It comes with powerful APIs, which make the system seamlessly connect with eCommerce platforms (such as Shopify or Magento), CRM tools, and leading carriers (like UPS and FedEx).  Such automation helps cut out any manual entry. As soon as an order is placed by a customer, it goes straight into the ERP system, inventory allocation happens, the shipping label is printed out, and the customer is notified without any involvement of a person who enters all this manually.  Conclusion  Wholesale distribution is all about efficiency, and Business Central is on top of the pack due to its ability to offer specific functions in an easy-to-use Microsoft cloud environment.  If distributors want to improve their business by enhancing efficiency and empowering their employees, then Business Central will be more than an ERP; it will be the way forward.
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