Financial Dimension Setup for a Manufacturing Company

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Posted on by HS-01071611-0

We are having difficulty with our inventory/production/COGS setup in D365. We need the Material, Labor and Overhead for items we produce to close out to their respective accounts upon invoice. Currently all costs associated with an order post to COS Material and I am having to create a manual journal entry to move costs to Labor and Overhead. The Labor and Overhead costs come from a report that was custom built for us..but if that report decides not work, we don't have accurate financials. There must be a way for the system to auto post to the correct accounts based on the cost categories? It has to be a setup issue. It cannot be that D365 simply does not allow you to set it up that way. Does anyone have a set up they can share that allows for these postings to be done within the system and not made manually at the end of each month?

Thanks!

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Dynamics 365 Finance

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André Arnaud de Cal... 301,049 Super User 2025 Season 2 on at

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Hi,

It is hard to tell on this forum what to do. Initially it sounds like the setup in your environment is not meeting your needs. There are options to post Material, Labor and Overhead on separate ledger accounts during the production updates without the need for manual corrections. I would suggest hiring an expert consultant to guide you for the best setup.

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PD-06020722-0 57 on at

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Hi, I agree. This is the beauty of the right setup with the posting profiles from the cost categories and the inventory production. Maybe you can check those.

The title of the question although has a different background with the financial dimensions on top of this. What is the goal here?

Kind regards,

Pasqual

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HS-01071611-0 8 on at

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We unfortunately have hired 'experts' who are telling us that D365 doesn't have the capability to post to separate accounts and all of our costs are hitting Standard Material. The manual entry each month is moving them from Standard Material to Standard Labor and Overhead. On top of this, all of the costs for a Sub Assembly item we produce are being posted only to the Standard Material line of the Parent item. We haven't been earning the labor or overhead on any of the sub assembly items we produce.

I know that the setup is wrong and I'm struggling with being told that D365 can't be used the way we want it to. I've got an idea of what to look at, but was hoping that someone knew of a guide that D365 has that will help me understand what some of the set up means: For example in your clip below, what is the difference between 'Accounts Physical' and 'Accounts Financial'. I have Administrator rights to our Test environment so I was planning on getting into that after we close the books for the month. A guide of some sort would be helpful so I can understand what some of the set up is doing behind the scenes.

Thanks!

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PD-06020722-0 57 on at

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Hi, I would recommend you to work closely with the MS documentation and many of the blog postings related to the topic. In very short, physical means, those accounts with the estimated transactions get posted when the production order is started, Debit WIP Clearing on the balance sheet, Credit Expense in the P&L. Financial means, with ending the production order the physical postings get reversed, and the accounts defined for the financial transactions get posted. Debit WIP Labor and credit Expense in the P&L and Debit finished goods and credit WIP Labor. Hope it helps!

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