How to create a chart of account rules management in Microsoft Dynamics 365 Finance and Operations

How to create a chart of account rules management in Microsoft Dynamics 365 Finance and Operations

Tracking and managing financial information is critical for any organization. For this purpose, Microsoft Dynamics 365 Finance and Operations has the capability to create a chart of accounts: a collection of accounts to define the financial structure.

The chart of accounts is a structured list of a legal entity’s general ledger account. We select different categories for lists as revenues, costs, assets and liabilities, etc.

In this process, we have to configure account structures, which are the correct combination of valid accounts and financial values. This is important in order to determinate how the accounts and dimension are related.

However, this process might be unclear for some since multiple errors can occur if the process is not done perfectly.

In this article, you will learn how to properly create a chart of accounts step by step in Microsoft Dynamics 365 Finance and Operations:

Posting profiles in Microsoft Dynamics 365 Finance and Operations

Particularly, through my time working with Microsoft Dynamics AX and now Microsoft Dynamics 365 Finance and Operations within multiple implementations, I have seen a common practice of defining account structure rules for GL accounts used for posting profiles. These are all accounts that are associated with transactions automatically when selecting a submodule account. We can find categories such as a vendor, bank account, customer, fixed asset, project, and so on.

Using the account structure rules is possible. Nevertheless, there are some cases in which instead of adding value, it becomes a difficult process to follow. Consequently, the process leads a high amount of errors when creating transactions.

An example of this would be when a specific dimension, for example a cost center, is set as mandatory for any transactions done for a FA account. This FA account is used as a posting profile for some asset transactions in the system. Therefore, when a user is creating an AP invoice to acquire the desired Asset they receive the following error:

Posting Profiles in Dynamics 365

Generally, the solution for this error is to manually go line by line for each invoice associated with an asset. Then we have to click on “Financial Dimensions”, followed by “Offset Account”, or “Main Account”, it depends of the asset column selection. Then, we would proceed to select the financial dimension required.

Posting Profiles in Dynamics 365

Doing this will resolve the error. However, it takes some time to do for each line and also is not an easy to remember step. Generally, I recommend avoiding setting account structure rules in accounts for posting profiles uses. Instead, use it for Profit and Loss accounts which will give the required detail as the record of expense or income.

How to configure the accounting structure for posting profiles account?

In order to make these changes in the accounting structure, we will need to go to General Ledger > Chart of Accounts > Structure > Configure Account Structures.

Posting Profiles in Dynamics 365

Once there, we have to search for the desired account and verify the rules set for each dimension, or if they need an adjustment. If the “Blank Values are Allowed” option is selected, it dictates that transactions posted to the accounts may have that specific dimension missing, which would be the recommended approach for any posting profile account.

Hope this article was insightful. Microsoft Dynamics 365 Finance and Operations requires an advanced understanding of its modules to deliver its full potential to your company.

If you require more details about the Microsoft Dynamics suite of business solutions or if you want to schedule a Demo, and one of our experts will contact you.

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