Finance | Project Operations, Human Resources, ...

Changing financial dimension on project transactions

(1) Share

Report

Posted on by LB-03061218-0

133

Hello Community,

We have multiple projects across different project types, including Time & Material (T&M), Fixed Price, Investment, and Cost Projects. A significant number of transactions have already been posted against these projects, including:

Project-related cost and hour transactions
Customer invoices that have been generated and posted
Customer payments that have been received and settled
Revenue recognition entries that have been posted

The current requirement is to change the financial dimensions associated with these projects.

Could you please advise on the key considerations, prerequisites, and potential impacts that need to be evaluated before proceeding with the financial dimension change? Specifically:

What happens to the existing posted transactions?
Can dimensions be updated directly on active projects?
Are dimension corrections/reclassifications required through adjustment journals?
What are the implications for invoicing, revenue recognition, reporting, and project accounting?
Are there any recommended best practices or limitations that should be considered?

Thank You in Advance.

Categories:

Dynamics 365 Finance

I have the same question (0)

All responses (2)

Answers (0)

Sort by

Adis 6,868 Super User 2026 Season 2 on at

Like (0)

Report
Copy link

Link copied!
Hi,
“The current requirement is to change the financial dimensions associated with these projects.” I didnt catch this phrase, because, is the project a financial dimension or do you have projects as financial values?
In general, you can think of financial dimensions like part of the master data that is being transferred to transactions.

What happens to the existing posted transactions? - nothing, they will still have the old financial dimension values
Can dimensions be updated directly on active projects? - yes, its “just” master data. Once you change it and create a transaction, the new financial dimension (value) is being posted on the transaction.
Are dimension corrections/reclassifications required through adjustment journals? - no, you can leave them. However, looking at 2 very similar transactions on the same main account can have different dimension values, the old one and the new one. The question is, how do you want to deal with it. Because Fin. Dim. are meant to separate\classify transactions, now you are changing it, that opens some challenges for reporting.
What are the implications for invoicing, revenue recognition, reporting, and project accounting? - It has only an impact on reporting, more or less, but I ll explain below more. Regarding invoicing, the transactions are still being posted on the same main account, just with different fin. dimensions afterwards.
Are there any recommended best practices or limitations that should be considered? - I would copy PROD to a sandbox and process the business cases to get some feeling how the transactions look afterwards and what to consider in detail, because its very company specific.
Things to consider - this is where not only reporting is to be considered.
You may have to change your account structure(s). If you have defined mandatory financial dimension for the main accounts, you have to change that because the financial dim. changed.
If you are using budgeting, you have to change that
General reporting, every report you have based on financial dimension has to be checked. Main question: Do you get the same information as before on the report and do you still need it?

Kind regards, Adis

If this helped, please mark it as "Verified" for others facing the same issue
Keep in mind that it is possible to mark more than one answer as verified

Was this reply helpful? Yes No
Suggested answer

CU-1234529-002 169 on at

Like (1)

Report
Copy link

Link copied!

Hi @LB-03061218-0 ,
Great answer from Adis above covering the general financial dimension mechanics , I'd add a couple of project-specific points since you mentioned invoicing and revenue recognition:
On already-invoiced/posted transactions: As Adis noted, historical postings keep their original dimension values — Dataverse/Finance doesn't retroactively rewrite ledger entries. If you truly need old transactions to reflect new dimensions (e.g., for a specific reporting period going forward), the standard way is a General Journal reclassification entry moving balances from old dimension combination to new, rather than trying to "correct" the original transaction. This keeps your audit trail intact.
On active projects with WIP/accrued revenue not yet invoiced: Be careful here, if you change the dimension on a project mid-stream and it has open/unbilled WIP, cost accruals, or revenue recognition not yet posted, those future postings will pick up the new dimension, but this can create a mismatch against already-recognized revenue on the same project under the old dimension. I'd recommend closing out any pending WIP/accrual postings before changing the project's dimension, so you don't end up with a split project history mid-lifecycle.
On T&M vs Fixed Price specifically: Fixed Price projects using POC (percentage of completion) revenue recognition are more sensitive to this — since revenue recognition is calculated based on project-to-date cost/completion, a dimension change mid-project won't affect the recognition calculation itself, but will affect which dimension the recognized revenue posts to going forward, which can distort trend reporting if not documented clearly.
Agree with Adis's suggestion, test this in a sandbox copy first, especially for a project with WIP and partial invoicing, so you can see exactly how the split looks in reporting before doing it in Prod.

Thanks!

Was this reply helpful? Yes No