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Best practice when it comes to account structure

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Posted on by Anette Jansson

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I am about to set up the account structure in the first of our group companies to have Dynamics 365. All group companies will share a common Chart of accounts, but not common account structures.

I have consulted two different experienced consultants and get different answers. One says to set up one account structure per "account -string", that is one structure for only main account (no dimensions, vat, rounding), one structure for balance accounts( two dimensions), one structure for cost accounts (three dimensions) and one structure for revenue accounts (four dimensions). He says that I should have ranges and use advanced rules for rules and limitations. Personally I don´t like that there is no indication that an advanced rule is connected to the line in the account structure.

The other one says that from a BI perspective it is better to only have two structures, one for BS and one for PL, and to have all dimensions visible for all accounts. It is also easier for the accountants making manual entries if the string is always the same. He also recommends to skip the advanced rules and add all accounts and restrictions in the structure. It will make a long list but is fair enough to maintain with Excel.

There are pros and cons with both, and I have never worked in a live system. How would you recommend me to set up the account structure?

/Anette

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André Arnaud de Cal... 300,911 Super User 2025 Season 2 on at

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Hi Anette,

It all depends on your requirements. I have seen customers with 15 account structures active in a legal entity. They did create a structure per combination of required dimensions. It was quite cumbersome to maintain.

It is impossible to give an answer without knowing the full requirements. If you are not using any dimensions, you can use 1 account structure with main account only. There are pros and cons for both options, but there are also more options possible here.

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Community Member on at

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Hi Anette,

This is a call finance or business operations has to take in an organisation. There is nothing wrong in creating as many account structures as required, but keep in mind that this can slow down you journal validations / ledger posting operations as your database grow over time since it calls validate account structure function multiple times depending on your settings and complexity.

Like you said, I have seen some implementations using One account structure for Balance sheet and another one for P&L and uses ranges in the segments allowed values.

You could also consider setting up Fixed financial dimensions for main accounts rather than complicating Account structures.

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Anette Jansson 105 on at

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Thank you both,

may I then add an additional question, we will have approx. 7 financial dimension (+main account), but all dimensions will not be applicable to all accounts. Is it preferable to have varying dimension combinations, or is it better to stick to one or two? From user and BI perspective? I understand that this is also depending, but I still would like some input.

BR

Anette

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André Arnaud de Cal... 300,911 Super User 2025 Season 2 on at

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Hi Anette,

From BI perspective, you don't have to follow a pattern. You can setup which dimensions will be used for data export (e.g. to data warehouse): docs.microsoft.com/.../financial-dimension-configuration-integration

For those 7 dimensions, you have to see which combinations would be really required per main account. Too many different combinations can confuse people when doing data entry. On the other hand, if you have three accounts using all 7 and the majority only 2 accounts, then I would not recommend to have all 7 available when in most cases, you only need to fill 2.

Probably also an interesting read: docs.microsoft.com/.../default-dimensions

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Ludwig Reinhard Microsoft Employee on at

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Good Morning Anette,

I am more in favor of the second option that used a BS and PL structure only.

Yet, I want to challenge you :-) with the following question: Why not use only one single account structure?

Another 'thing' that needs to be taken into consideration and that you have not mentioned above is budgeting and budget control. The latter one works only in combination with a single account structure. In other words, if you have multiple account structures and want to enable budget control then you have to decide for one account structure that can be used for budget control.

Finally, think about maintenance of the whole stuff. I once saw a project with 30+ account structures and the only one who was able to tell you and and where those structures were used was the finance guy who setup the stuff but then left the company... Easier and simpler if sometime better :-)

All the best,

Ludwig

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Anette Jansson 105 on at

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Thank you guys for your answers.

I think I know how to attack this issue now. I will create a matrix with different types of accounts where I mark which dimensions are not applicable, optional or required.

From that I will decide the number account structures, leaning towards one or two (taking the budget control issue into account), and I will keep the same accounting string for accounts where manual posting is allowed, not to confuse users.

BR

Anette

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Rahul Mohta 21,032 on at

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from maintenability perspective, keeping it granular may help

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saurabh bharti 15,039 Moderator on at

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Hi Anette,

Here are few suggestions from my experience:

1. Before deciding the accounting structure , we should first define the Chart of account in such a way that applicability of financial dimensions are defined at "Main Account Category" level not a individual Main account

E.g. 301001,301002....30100N are my Main accounts under Main account category "301" so we should have applicability of FD at 301 level not that 301001..301004 will use dimension or set of dimension and 301005...30100N will use different dimension or set of dimension.

2. It is always good to define two accounting structure "BS" and P&L" , if there is any exception we should allow blank to the accounting structure for the "Main Account" range

3. It is always suggest-able that not to use financial dimension for balance sheet item , if require Business unit, Site can be used for the same

4. If there is a requirement of having Common chart of accounts and having different accounting structure across entity, first you should avoid to have different because during consolidation you will not be able to consolidate at FD level

5. If require having different accounting structure then use "Advance Rule" structure for the same

Hoe this Helps you!!!

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Anette Jansson 105 on at

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Thank you! it is coming together, piece by piece.

BR

Anette

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Ludwig Reinhard Microsoft Employee on at

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Hello saurabh bharti,

Can you comment on your no 2 and 3?

For No 2: Why is it always good having 'BS' and 'P&L'?

For No 3: Why is it always suggested using financial dimensions for balance sheet accounts?

Many thanks,

Ludwig

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