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Business Central

7 Business Central Features Every CFO Should Know About
20
Jul

7 Business Central Features Every CFO Should Know About 

The position of the CFO has undergone dramatic changes. Not anymore do you act merely as a “chief number cruncher”; rather, you now become a catalyst for growth of the business. How? It is by means of an integrated system with smart functionality providing up-to-date insight into the financial wellbeing of the company.  There are seven Business Central features which every CFO needs to be aware of to maximize their efficiency.  1.Real-Time Financial Dashboards  There are no more waiting periods of several weeks after closing the books at the end of the month before you can find out how the business is doing. In Business Central, there are role-based real-time dashboards for the CEO which enable him/her to see the KPIs, to monitor liquidity, profitability, and expense ratios. Power Bi Finance app also helps to monitor KPIs.  2. Intuitive Cash Flow Forecasting  Cash is the heart and soul of any business but forecasting it has always been a tough job. With the help of Business Central, you can remove this uncertainty because it helps you in forecasting your cash flows using historical data as well as planned receivables and payables. It gives you an edge over your competitors as it helps you plan for any shortfall in the future and manage your cash intelligently.  3. Automated Accounts Payable/Receivable Workflows  Data entry is time-consuming and creates errors which cost money. With Business Central, you don’t have to enter all that data manually. With automated accounts payable and receivable workflows, you get more free time to use on other tasks. Tasks like matching invoices and even automated payment recommendations save you plenty of time.  4. Smooth Power BI Reporting  Traditional financial reports may fail to paint a complete picture. Since Business Central is native to the Microsoft environment, it automatically provides native integration with Power BI. This means that CFOs can create customized financial reports without moving data into Excel. With Business Central, you will be able to drill-down from a high level of financial reports straight into transactional details.  5. Easy Intercompany Consolidations  When running more than one subsidiary or entity, financial consolidations are often time-consuming and error-prone due to version control issues. With Business Central, all intercompany postings and eliminations are done automatically. Financial consolidations in various currencies and fiscal years using various charts of account can be created easily in just a couple of clicks.  6. International Compliance and Multi-currency  Going international means dealing with many different tax laws, financial reporting, and exchange rates. Business Central has built-in support for an unlimited number of currencies, automatic conversion to exchange rates, and localized tax compliance. The more you expand internationally, the more the system will adapt to local financial rules reducing the compliance risks and burden of your internal audit team.  7. Artificial Intelligence in the Form of Copilot  The future of accounting involves predictive analytics, and now you have access to that through Microsoft Co-pilot. CFOs can prompt Co-pilot using natural language to generate a summary of the financial performance of the company, analysis of anomalies in budget variances, and even sales forecasting. AI assistance allows you to save several hours of tedious data mining every week and transform it into strategic narrative.  Conclusion  For the contemporary CFO, Business Central is not only an ERP system but a strategic ally. It allows you to automate mundane tasks, get rid of siloed data and use artificial intelligence to provide predictive insights. If your current financial software is hampering your work, it might be high time to consider implementing Business Central in your company.
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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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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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How Predictive Analytics in Business Central Improves Business Decisions
27
Apr

How Predictive Analytics in Business Central Improves Business Decisions 

Have you ever felt like you’re driving your business blind by only looking through the rear-view window?  Traditional business reporting gives you visibility on what has happened over the last month, last quarter, or last year. While historical data is certainly important, it is often historical or “rear-view window” data. It is often too late to react to a trend or opportunity revealed by a standard report. By the time you identify a trend or opportunity through a standard report, it may be too late to capitalize on it or avoid a catastrophe. This is where Predictive Analytics within Microsoft Dynamics 365 Business Central shifts the paradigm.  Here is how Business Central’s Predictive Analytics empowers you to make more intelligent decisions, sooner, and more profitably.  1. Optimizing Inventory with Demand Forecasting  For companies with inventory levels, it is a constant balancing act between having too much in stock and tying up cash flow and incurring additional costs for storage and having too little in stock and risking losing sales and alienating customers.  Business Central utilizes its capabilities in predictive analytics to examine historical sales data and current market conditions to create Demand Forecasts for companies with inventory levels.  The Decision: Instead of making educated guesses on how many of something to order based on historical sales data, you use artificial intelligence to predict future demand.  The Result: You save costs and maximize the effectiveness of your purchasing budget.  2. Mastering Cash Flow with “Smart” Predictions  Cash flow is lifeblood to any business. One of the most stressful things about being a business owner is worrying whether you are going to have enough cash to meet those bills and taxes that are coming due next month.  Business Central offers a Cash Flow Forecast chart that goes beyond simple due dates. With Azure AI, it can learn the payment patterns of your unique customers.  The Insight: Perhaps it recognizes that “Customer A” is a Net 30-day customer but pays in 45 days.  The Decision: Cash Flow Forecast automatically takes this into account and updates the payment date.  The Result: With this information, you can secure financing or put off expenses before a cash shortage occurs, rather than scrambling when checks start bouncing.  3. Mitigating Risk with Late Payment Prediction  Offering credit to your customers is an essential part of sales. However, it is also an area of risk with “bad debts.” Hunting down late payments is a tedious task. In fact, at times it may even harm your relationship with the customer if you end up chasing the wrong one.  What Business Central Does  Late Payment Prediction is an extension available on Business Central, developed by Azure AI. It analyses all your outstanding invoices and assigns a “risk score” to each of your customers based on its prediction of late payment.  The Decision  With Business Central, you have an opportunity to be strategic with your collections. If a customer has a “high risk” score, you may send a friendly reminder a few days before the payment is due. Conversely, if a customer has a “low risk” score, you may wait a few days after the payment is due to avoid annoying your customer.  The Result  With Business Central, your accounts receivable team becomes efficient, and your cash flow improves without annoying your customer.  4. The Competitive Advantage: Data-Driven Agility  The ultimate advantage of using predictive analytics with Business Central is agility.  In a changing marketplace, the companies that succeed are those that can change direction quickly. If your ERP system is warning you about a potential drop in sales or cash flow problems weeks in advance, then you have time to react.  You are not fighting fires; you are preventing them from happening.  Conclusion  Predictive analytics is no longer something only the titans of industry with the deepest pockets for IT can afford. With the integration of these features directly into Business Central, Microsoft has put the power of big data into the hands of SMEs.  If you are ready to stop looking in the rearview mirror and start looking through the windshield, then it is time to tap into the predictive potential of your Business Central solution. 
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Migrating from Legacy ERP to Business Central: Lessons Learned
06
Apr

Migrating from Legacy ERP to Business Central: Lessons Learned 

Migrating from a system is not just about the system; it is about transforming the way your company works. If you are about to embark on the journey to the cloud, here are the hard-earned lessons we learned along the way.  1. “Lift and Shift” is a Trap  The biggest mistake companies make is treating the migration as a copy-and-paste operation. They want to take their messy, convoluted processes from the old system and copy them over to Business Central.  The Lesson: Don’t automate a bad process.  Legacy systems are often messy because the software couldn’t do what the business needed. It required workarounds. Business Central is a much more capable system. Take advantage of the migration to think about your processes. If your old system required five steps to approve a purchase order, see if Business Central can’t do it in two. If you try to make Business Central look and act exactly like your old Legacy system, you will be throwing money away.  2. Data Hygiene is Non-Negotiable  Business thought they had clean data. They didn’t. On extracting data from the old system, we usually discover that there were thousands of obsolete customer data, duplicated vendor data, and inventory items that were not sold in the last ten years.   The Lesson: Don’t boil the ocean.   Don’t migrate everything. You’re moving into a new house. Don’t bring the trash with you.   Archive the old data. Keep the old system accessible. Make it read-only.   Cleanse the master data. Customers. Vendors. Items (GL accounts).   Bring the opening balances. Do bring relevant historical data but not ten years of closed transactional history.  3. Configuration vs. Customization  This is the Golden Rule of Business Central. In the old days, we used to customize the code for everything. We wanted the button to be blue, not grey. We wanted the report to be printed in a specific font.  The Lesson: Stay Standard (Standard = Good).  Every time we customize the code in BC, we make it harder and costlier for future upgrades.  Try and configure the system using standard settings.  Try and look for App Source extensions/add-ons rather than customizing code.  Customize only if it gives you a competitive advantage.  4. The “Excel Trap” is Real  One of the most powerful features of Business Central is its native Excel support. However, be warned that it is also one of the most insidious “features.”  During the go-live of our project, we had users who were afraid of the new UI. Instead of learning how to enter a sales order in BC, they were trying to download everything into Excel, manipulate it there, and paste it back into the system.   The Lesson: Train Early and Train Often  Change management is harder than the technical implementation. People need to be convinced that Business Central is easier than their spreadsheet hell. Invest in “Champion Training” find super users in every department who will be able to pressure their co-workers into using the system correctly.  5. Your Partner Matters More Than the Software  Business Central is a wonderful product, and it’s a platform. It needs a partner to implement it. Chose a partner based on a bid price, and it was a disaster waiting to happen. Chose the lowest bidder, and they treat like a number.   The Lesson: Find a partner that understands your industry, not just the software.  A retail implementation versus a manufacturing implementation is vastly different. Changing partners halfway through the project to one that specialized in the industry costs you more.  6. The Go-Live is Not the Finish Line  Go Live day is, crossing the starting line at a marathon.  The First Month Was a Bumpy Ride  Users forgot passwords. Reports looked a little different. Changes needed to posting groups etc.  The Lesson  Plan for a “Hypercare” period. For the first 4 to 6 weeks after Go Live, be prepared to need extra support. Keep your implementation partner on speed dial. Don’t consider your project complete until you have successfully closed a month-end and run your payroll.  The Bottom Line  Migrating from a legacy ERP system to Business Central is hard. It takes money, time, and a thick skin.  But is it worth it? Yes.  You will have a real-time visibility into business. Can close financials in days instead of weeks. Remote workers can access data from anywhere and you don’t have to think about server maintenance anymore.  If you are considering making the move from a legacy ERP system to Business Central, take the leap, clean your data, and trust the process for your journey to the cloud.
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