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Microsoft Dynamics AX (Archived)

Financial dimension to represent legal entity vs Legal entities

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Posted on by Community Member Microsoft Employee

Hello,

Let say you have 15 legal entity companies that operate similarly in AX2009 or 2012, each is currently there own dataareaid.
You are now doing a D365 implementation.

Has anyone ever setup there D365FO instance by creating 1 Legal entity and then creating a financial dimension called say "CorpID" that would allow you to record transactions by dimension against those 15 companies inside that 1 entity instead of entering entries into 15 individual legal entities? 

Microsoft mentions it as not recommended but I'd be interested to see if anyone has gone down this road and what challenges they might have had? 

"Although Financial Dimensions can be used to represent legal entities without creating the legal entities in Microsoft Dynamics AX, financial dimensions aren’t exactly designed to address the operational or business needs of legal entities. Before setting up financial dimensions as legal entities, evaluate business processes in the following areas to determine if this setup will work for the organization or not.

  • Inventory
  • Sales/purchases between financial dimensions and legal entities
  • Sales tax calculation and reporting
  • Operational reporting"

*This post is locked for comments

  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 291,711 Super User 2024 Season 2 on at
    RE: Financial dimension to represent legal entity vs Legal entities

    Hi Reichy,

    The list from Microsoft is a bit short. Like Ludwig mentioned, you would need a lot of customizations. Think of number sequences where you might need customizations to handle voucher numbers and invoice numbers per legal entity. A legal entity is a legal entity and not a dimension value....

    Have also a look at an older thread with some more comments and considerations: community.dynamics.com/.../124857

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Financial dimension to represent legal entity vs Legal entities

    Thanks we may do a POC for this. I was just looking to see if people had actually done it and any challenges they ran into. if there were hard No's , don't do it then I wouldn't have to waste too much time.

    Thanks for the replies.

  • Verified answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Financial dimension to represent legal entity vs Legal entities

    Hello Reichy,

    I think the best thing to find out what might fit best is doing some testing.

    Can't you and your partner setup 4 or 5 companies in a single legal entity and then do some postings? Probably in the scope of a Conference Room Pilot?

    Then you should quickly see what might work and what requires modifications.

    I think this is what I would go for before starting an implementation that is based on some good but still theoretical considerations.

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Financial dimension to represent legal entity vs Legal entities

    Thanks for the reply Ludwig!

    The thought process from our partner is that some of the pros would be

    a) all transactions record in one company, don't have to switch

    b) possibly easier to do reporting within that company

    c)set and config changes are done once  (however this could be a con as you may be shoehorned into accepting certain config)

    There are many cons as well so I'm just trying to get a handle on what all those might be as I too am leaning toward not going down this road.

    I should mention my example is a bit off as we actually have around 100 legal entities that is proposed to divide into possible 5-7 entities with the rest as findim.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Financial dimension to represent legal entity vs Legal entities

    Hi Reichy,

    Recently I talk to a colleague who just planned to do something similar.

    Even though you can have the 15 legal entities incorporated into a single one expect some modifications in the areas that you are listed.

    Especially when it comes to legal reporting (tax reports, intrastat reporting, external invoice documents, etc.) you will need to make quite some modifications.

    Also internal SSRS reports might require some modifications in order to allow you filtering data by legal entity (FinDim).

    If there is no immediate process related or structural requirement I would go for the 15 companies and follow the MS recommendation.

    What is the main reason that makes you considering incorporating those 15 companies into a single one?

    Best regards,

    Ludwig

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