Heart of Dynamics 365 Finance : Financial Dimensions

Hi Folks,

If you are working with AX 2012 or Dynamics 365 Finance & Operation you must have heard the word “Financial Dimensions”. Do you know what is the “Financial Dimension” means? and what is the use and features related to it in Dynamics 365 Finance & Operation?

If No, keep reading I have list out the number of interesting things about “Financial Dimensions”.

If Yes, I would suggest to keep reading as I have something you might does not know.

Let’s start the journey here.

What is “Financial Dimensions”?

Let’s First understand what is the “Dimension” means? – The typical answer is “a measurement of something in a particular direction, especially its height, length, or width“

Now we understood that dimension are always used as measurement something. In the same way Financial dimensions are data classifiers that are used for financial reporting. Financial dimensions identify information such as the Business Unit, Cost Center, Department, etc.

Now we understood what is financial dimension, now let’s understand why do we need it?

What is the use of “Financial Dimension”?

Financial dimensions allowed us to segregate the transactions based on Financial Dimensions.

Example: we have recorder all the expense and revenue in system but now we wanted to generate Financial Statement of particular Business unit or Cost center.

In this scenario we have to use Financial dimension to bifurcate the transactions in same main account using financial dimensions.

Each transaction needs to capture Financial dimension to achieve common objective of implementing Financial dimension.

What type of Financial Dimension we could create in Dynamics 365 Finance?

Entity-backed dimensions

To create an entity-backed financial dimension, in the Use values from field, select a system-defined entity to base the financial dimension on. Financial dimension values are then created from that entity. For example, to create dimension values for projects, select Projects. A dimension value is then created for each project name. The Financial dimension values page shows the values for the entity. If those values are company-specific, the page also shows the company.

Custom Dimensions

To create a user-defined financial dimension, in the Use values from field, select Custom dimension.

You can also specify an account mask to limit the amount and type of information that can be entered for dimension values. You can enter characters that remain the same for each dimension value, such as letters or a hyphen (-). You can also enter number signs (#) and ampersands (&) as placeholders for characters that will change every time that a dimension value is created. Use a number sign (#) as a placeholder for a number and an ampersand (&) as a placeholder for a letter. The field for the format mask is available only when you select Custom dimension in the Use values from field.

How to create “Entity-Backed” Financial Dimensions?

1. Path to create financial dimensions
2. Select “New”
3. Select Specific entity (Master Table) from whare we want to get value

Example : we can use Business Unit or Cost Center. The data will be created in Organization form and the same value will be used for dimension values. we can check it from “Dimension values” from same page.

How to create “Custom” Financial Dimensions?

1. Path to create financial dimensions
2. Select “New”
3. Select “<Custom Dimension>” and provide appropriate name of Dimension. Example Vehicles
4. Click on “Dimension values” to create Financial dimension values in this Dimensions.

1. Click on “New” to create new record in dimension value
2. Provide Dimension value code (This will be unique record)
3. Provide Dimension value name

How to manage the financial dimension values?

As we can see this form is divided into two part

A. General

B. Legal entity Overrides

Let’s understand each one in detail.

A. TAB : General

This tab contain general configuration / control applicable to all legal entity available in system.

1. Active from & Active to
   • Using this feature we can control the dimension value for specific period.
   • We can use each control independently also. Example we had one dimension value from beginning but we want to stop using this dimension from 31-Dec-2021, we just have to update this date into Active to field.
2. Suspended (Yes or No)
   • This feature allow use to suspend the dimension value. Once the dimension value is suspended user can not use the same dimension value in any transactions. This control is without any date so it will suspended from entire system.
3. Group Dimension
   • Providing value on this dimension value we can transfer the amount / balance of specific dimension value to Group Dimension performing consolidation process.
   • This functionality allow business to use different values at independent company reporting level but common values at global reporting level.
   • Example : One Company wanted to use Region dimension values as different cities of country but at Global level group want to bifurcate Region as East, West, North, South and Central. in this case each City dimension value will have specific Group Dimension value.
4. Calculate the total from multiple dimension (a,b,c.. check in below screenshot.
   • a. Selecting “yes” in this function we can enable the Total functionality of multiple dimension values
   • b. Click on “Total” to open the new form.
   • c. Click on “New” to create record in this form
   • d. From value and To value, this function will allow us to provide a range of dimensions for sum.
   • e. Invert sign – This function help us to do proper reporting, let say we wanted to show positive value from sum of all selected dimension which was recorder as Credit, we can use this function.

5. Do not allow manual entry
   • This function restrict the users to post transaction directly using manual journal entry.
   • It means system only allow users to post transaction if it is coming subledger and not direct ledger.
6. Owner
   • In this field we can define any specific employee who will be owner of this specific dimension values.
   • Example, If I have any dimension vale as “Finance” in Dimension Department / Team, I’ll choose our Finance Manager as Owner of this dimension value.
7. Require the dimension value to be balanced
   • Using this function we can make sure dual entry is posted for this dimension.
   • This function is very useful where wanted to make sure we can generate matching trial balance for any specific dimension value.
   • This functionality we normally use when we have more than one Business Unit and they are working Independently and we wanted to generate independent Trial Balance (which is matching to Zero) by Business Unit.

B. TAB : Legal entity overrides

This tab contain legal entity specific configuration / control.

1. Legal Entity & Name
   • Here we have to choose specific legal entity on which we want to apply different configuration / control.
2. Suspended (Yes or No)
   • This feature allow use to suspend the dimension value. Once the dimension value is suspended user of this legal entity will not be able to use the same dimension value in any transactions. This control is without any date so it will suspended from entire system.
3. Active from & Active to
   • Using this feature we can control the dimension value for specific period for selected legal entity.
   • We can use each control independently also. Example we had one dimension value from beginning but we want to stop using this dimension from 31-Dec-2021, we just have to update this date into Active to field.
4. Owner
   • In this field we can define any specific employee of selected company who will be owner of this specific dimension values.

I hope this will help you to understand the meaning and use of Financial Dimension in Dynamics 365 Finance. We will continue the journey of exploring Dynamics 365 Finance soon.

Hasta luego..

Thank you,

CA Gaurangkumar Jani