Microsoft D365 Finance & SCM - Scenarios For Site and Warehouse Hierarchy

Good Morning Everyone!

I hope you people are even more productive sitting on your couch and working from home.

In order to make the COVID19 diaries more memorable here is yet another blog post, it is about setting up site and warehouse hierarchy. It will help us to architect the solution while you need one site for all the warehouses or multiple sites.

Notes for Business

• We store inventory in the warehouse. This warehouse can have multiple locations.
• We can view the inventory at the site, warehouse and location level. 
• Once the warehouse assigns to a site you can't assign that warehouse to any other site.
• Since it is not possible to move the warehouse to a new site. We need to create a new warehouse and move the stock. 
•  How to move the stock from old to the new warehouse? Extract the on-hand inventory of old warehouse in excel and import in the transfer journal through the Excel upload template. 
• There is no financial voucher if you transfer the stock from one location to another within the warehouse. 
• It's possible to generate the financial voucher if you are transferring the stock from one site to another site. The warehouse must have a different site only then the system can generate the financial voucher.
• If the sites are the same and you transfer the stock to two different warehouses there will be no financial voucher. It means you are just transferring your inventory and it's the value from one warehouse to another warehouse. 
• A financial voucher for inventory transfer is created only for Indian localization in the standard system even if you are transferring the stock within the same site from one warehouse to another. 

What is the Site?

A site is a grouping of business resources, such as warehouses and production units, which share interrelated transactions, are located at a particular geographic location, and belong to a single legal entity. A single site cannot be shared by multiple legal entities.

Here I have transferred the stock from Warehouse 11(Site 1) to Warehouse 21(Site 2). Since the stock is transferred between two different sites the system has generated the financial voucher in the below screenshot.

The interunit payable and receivable balance updated. The inventory issue and receipt account are also updated.   

Finance can verify the Trial balance. Also, you can view the below trial balance by using Warehouse as Financial Dimension. 

The business can also view the inventory value report. The value for the item is updated with 62.48 in the warehouse 21. 

Can we link the Financial Dimension to a Site?

The answer is Yes, but the limitation is that we can only link one financial dimension to a site. 

How to set up a link between the Financial Dimension and Site?

The setup is available in the inventory management module.

Here is the path: Inventory management > Setup > Posting > Dimension link.

When we set up a link between a financial dimension and the site inventory dimension, the legal entity can calculate profit and loss figures for each site.

We can use the following procedures to configure and manage financial dimension links for sites:

• Set up a financial dimension link to a site

• Activate the financial dimension link

Conclusion

• You can create a single site and manage all your warehouses under that site. It's easier to manage all the warehouses under one single site. However, there will be no financial voucher in this scenario. 
• In the case of a multisite scenario, if we transfer the stock the system will generate the Financial Voucher and accounts will be updated for Interunit payable and receiable accounts. 
• We can also associate the financial dimension link with the site if we want to view the financial voucher by a specific financial dimension. 
• We can only link one financial dimension with the site. 
• Business process owners need to decide what financial dimension they want to link with site. If they need balance sheet and P&L by the business unit they will link BU with the site. However, if the requirement is to create the balance sheet and P&L by store than it's better to link the Retail store as a financial dimension.  

I hope this blog will be helpful for you to design and setup your sites and warehouse hierarchy. 

If you have any comments feel free to share. 

Cheers

Ali Danish

Business Consultant D365 Finance & SCM