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Chart of Accounts design in D365

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Posted on by Dhananjay Vyavahare

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Hi All,

I have a one requirement regarding the Chart of Accounts.

Client want to maintain the three COA in D365

1) Operation COA

2) Group COA

3) Statutory COA

all the transactions are posted in Operation COA . So by keeping this requirement I am planning to design COA in the following manner

Group - Internal transfers of funds with Main Account type = Total ( Total of Operation)

Statutory - Internal transfers of funds with Main Account type = Total ( Total of Group)

Operation - Internal transfers of funds with Main Account type = Assets ( Transaction posting in this account)

For the Financial statement I will use Financial reporter and design the reports for Operations, Group and Statutory.

So is this approach is correct or there is any other way to maintain this?

Kindly suggest me the best approach to address this requirement.

Thanks in advance.

rgds

dhananjay

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Ludwig Reinhard Microsoft Employee on at

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Hi,

I often see companies using financial dimensions that are used to reflect the different COAs and the respective mappings.

That is needed if you follow different accounting regulations in parallel such as IFRS for operations and US-GAAP for the group as an example.

If you only need a different way to summarize accounts then you don't need total accounts in the COA.

That is because you can realize the different summations in the financial report designer by creating 3 different sets of financial reports.

Best regards,

Ludwig

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Dhananjay Vyavahare 190 on at

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Hi Ludwig,

You mean to say shall I use different posting layers for Group and statutory COA. Like for the Operation the layer will be Current , for Group COA the layer will be Operations and for Statutory COA the layer will be Custom layer 1

is the above understanding is correct or you are suggesting something else.

rgds

dhananjay

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MauricioSaldana Microsoft Employee on at

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Hi Dhananjay,

For me seems a valid option but some points to take into account, if you create a new account you will need to be sure you update the Group and Statutory total this could be challenging for certain customers and also depending if you have many different entities for different countries.

Other option is to create fix financial dimensions for this purpose.

Another option is to use the posting layers

I hope this can help you

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Dhananjay Vyavahare 190 on at

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Hi Mauricio,

Thank you for your response.

Regarding your suggestion of fix financial dimension how to do that as the one account is being the part of Operation, Group & Statutory COA. So for one single GL account how the dimensions are fix ?

So want to know more on this.

rgds

dhananjay

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MauricioSaldana Microsoft Employee on at

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Hi Dhananjay,

For your scenario you will need two dimensions, one for operation and one for group, statutory will be done through the normal GL account.

To fixed the dimension, you need to go to the main account, add the legal entity override, click Default dimensions and then select the dimension you want to fix for this GL account and company

The advantage of this approach is that is easily escalable because you can have different dimension values per company/country

Regards

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Veronika Filonenko 1,261 on at

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Hi,

In my experience if the need to use a reference statutory COA - use a financial dimension and fix the reference for each account for the legal entity on the main account form. That is what we did for our reference to the COA in France vs Canada. We also did a little mod so that if a new account if opened in Canada, the user would get alerted to map the reference dimension prior to closing the form, if he would forget to do it. So that there wouldn't be any wholes at posting.

For the need to present information with IFRS - posting layers is the way to go.

I would stay away from using multiple COA or totaling accounts. It's an old way of doing things and it causes more issues in MR then helps. Maybe I misunderstood the need, but to me your Total COA is the same as Operating one. Aren't they the same accounts or they different? If they are the same, then - MR, if they are different - another dimension,

If you need to create totals, you can easily achieve it through MR in many ways, like Ludwig mentioned.

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Ludwig Reinhard Microsoft Employee on at

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Hello dhananjay,

No, that's not what I mean.

What I got from your question is that you want to summarize and structure accounts differently in your financial reports.

This implies that there are no differences in the way how you account at the group level, the statutory level, etc.

Can you confirm that?

Take fixed assets as an example:

Do you apply the same depreciation method and do you depreciate a fixed asset over the same period for the different reports that you have to create?

In other words, can you spend some time and explain us whether and what differences you have between the different reporting areas?

Best regards,

Ludwig

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Rahul Mohta 21,042 on at

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should be trying to use a single COA and create accounts and FD and then restrict them to legal entities

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Dhananjay Vyavahare 190 on at

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Hi Ludwig,

My question is regarding the design of COA .

As the requirement is to have 3 COA one for Operations 2nd for Statutory and 3rd For Group.

All the transaction will be booked in Operation GL account . The Operation COA is detail COA and rest statutory and Group COA is summary level .

I will give example here so that it will better to understand:-

5800 - Internal Transfer of Funds ( Part of Statutory )

58000 - Internal Transfer of Funds ( part of Group)

58 - Money in Transfer ( Part of Operation)

58000100 - Money in Transfer in bank ( Part of Operation)

58000300 - Money in Transfer - debit card ( Part of Operation)

58000400 - Money in Transfer - VISA ( Part of Operation)

So the above is the current COA and the requirement is to have similar in D365.

There is suggestion to use Financial Dimension and fix the same at GL account level.

so in that case I have to create one FD as Statutory and other one as Group and then default it at GL level.

is my understanding is correct or not let me know.

I have a question in dimension approach how as Í have other Financial dimension also those also want to use during transaction.

So kindly help me in designing COA so that it will be optimum one.

Thank you in advance for your help.

rgds

dhananjay

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MauricioSaldana Microsoft Employee on at

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Hi,

Yes, your understanding is correct. You need to take into account that you can have as many FD as you want (can handle) and you will need to design how and where they need to be use (accounts structure, advance rules, allocations, etc)

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