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Microsoft Dynamics AX 2012 R3 Financial Management
Microsoft Dynamics AX 2012 R3 Financial Management

Microsoft Dynamics AX 2012 R3 Financial Management: Boost your accounting and financial skills with Microsoft Dynamics AX 2012 R3

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Profile Icon Mohamed Aamer Ala El Din (USD)
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R$80 R$245.99
Full star icon Full star icon Full star icon Full star icon Half star icon 4.1 (16 Ratings)
eBook Feb 2015 352 pages 1st Edition
eBook
R$80 R$245.99
Paperback
R$306.99
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Renews at $19.99p/m
Arrow left icon
Profile Icon Mohamed Aamer Ala El Din (USD)
Arrow right icon
R$80 R$245.99
Full star icon Full star icon Full star icon Full star icon Half star icon 4.1 (16 Ratings)
eBook Feb 2015 352 pages 1st Edition
eBook
R$80 R$245.99
Paperback
R$306.99
Subscription
Free Trial
Renews at $19.99p/m
eBook
R$80 R$245.99
Paperback
R$306.99
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Renews at $19.99p/m

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Microsoft Dynamics AX 2012 R3 Financial Management

Chapter 2. Understanding the General Ledger

The chart of accounts (COA) is the backbone of Enterprise Resource Planning (ERP). It is part of the financial module, which is the foundational module of ERP. It is a list of categorized ledger accounts (known as main accounts in Microsoft Dynamics AX 2012 R3) that is used by the organization to record all financial transactions, and it depends on the nature of the organization's business. The COA of manufacturing companies differs from trading companies, service companies, and so on. This chapter covers the following topics:

  • Understanding the chart of accounts
  • Classifying main accounts
  • Controlling main accounts
  • Understanding shared financial data
  • Understanding financial management in action
  • Opening balance
  • Performing daily transactions
  • Closing procedure

Understanding the chart of accounts

The classified skeleton of a main account is the responsibility of the controller from the customer side and the application consultant from the partner side, who bridges the application capabilities to the customers' requirements. This activity is designed in the analysis and design phases, and deployed in the deployment phase.

Main accounts are at the core of financial reporting and include the trial balance, balance sheet, income statement, working capital, and cash flow. The starting point in building COAs is identifying the financial reporting requirements to ensure that all classification levels and categories are captured in Microsoft Dynamics AX.

Classifying main accounts

The first classification of main accounts in Microsoft Dynamics AX is the type, which represents the nature of the ledger account, that is, is it a balance sheet account or a profit and loss account? The following figure shows an example of a balance sheet and an income statement...

Understanding shared financial data

Microsoft Dynamics AX 2012 R3 introduced a new concept called shared financial data, which reduces the effort and time of deployment in a multiple-company environment and operational maintenance as well. A group of companies can share the same chart of accounts, currencies, and dimensions; this decreases the operation time. For example, a new main account will be available to all companies. The following figure explains the concept of shared financial data in detail:

Understanding shared financial data

The financial data that will be shared between companies is as follows:

  • Chart of accounts: This contains the main account
  • Account structure: This contains the applicable dimensions of the main accounts
  • Fiscal year: This contains the start date and end date of the fiscal year and the period's management
  • Currencies: This represents the default currency and reporting currency
  • Exchange rate type: This sets the monthly exchange rate for foreign currencies and the default budget exchange rate

To...

Exploring the sales tax mechanism

In this section, we will explore the sales tax mechanism in Microsoft Dynamics AX R3. The sales tax is registered on both the vendor/customer level and the item level to cope with international suppliers that reflect different tax rates for the same item. The system must recognize the same tax rate in the vendor/customer and item levels to process the transaction. The calculated reflection of the sales tax on the finance module is shown in the following figure:

Exploring the sales tax mechanism

In order to define sales tax in Microsoft Dynamics AX 2012 R3, you have to create tax authority, period settlement, ledger posting group, sales tax code, sales tax group, and item sales tax group.

In order to create sales tax authority, navigate to General Ledger | Setup | Sales tax | Sales tax authorities. Link the tax authority with the vendor ID, as shown in the following screenshot:

Exploring the sales tax mechanism

In order to create period settlement, navigate to General Ledger | Setup | Sales tax | Sales tax settlement periods...

Understanding financial management in action

Here, we will understand the process of financial management through the opening balance and various daily transactions.

Opening balance

When a company migrates from a legacy ERP solution to Microsoft Dynamics AX, one of the important data migration tasks is creating opening balances in the new Dynamics AX system based on the closing balances of the previous closed period (often the fiscal year) from the legacy system.

In order to ensure the accuracy of your Dynamics AX's opening balances, it is important to take a systematic approach to the process of planning, designing, and executing the migration of data for trial balances and subledgers, as well as validation and reconciliation of these elements along with the general ledger, subledger, and financial dimensions. In this section, we will lay out the process and elements involved in creating new opening balances in Microsoft Dynamics AX from a legacy system.

Elements of opening balances are...

Closing procedure

The closing procedure is a common practice at organizations to finalize the monthly transactions and report the monthly financial reporting. The procedure varies from one company to another, but it has common steps between company departments.

The finance controllership department is responsible for the closing procedure, where accountants follow up with the operations department to confirm that they have posted the monthly transactions in the ERP. The following figure explains the closing procedure in detail:

Closing procedure

All the departments in a company are involved in the monthly closing process. The Human resources department calculates the payroll and generates the payroll entry to be validated and posted by the general ledger's accountant.

The Procurement department ensures that they have confirmed all purchase orders to be received at the warehouse and the warehouse keeper confirms receiving them as it affects the inventory quantities and values. On the other side, the accounts...

Understanding the chart of accounts


The classified skeleton of a main account is the responsibility of the controller from the customer side and the application consultant from the partner side, who bridges the application capabilities to the customers' requirements. This activity is designed in the analysis and design phases, and deployed in the deployment phase.

Main accounts are at the core of financial reporting and include the trial balance, balance sheet, income statement, working capital, and cash flow. The starting point in building COAs is identifying the financial reporting requirements to ensure that all classification levels and categories are captured in Microsoft Dynamics AX.

Classifying main accounts

The first classification of main accounts in Microsoft Dynamics AX is the type, which represents the nature of the ledger account, that is, is it a balance sheet account or a profit and loss account? The following figure shows an example of a balance sheet and an income statement...

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Description

This book is intended for application consultants, controllers, CFOs, and other professionals who are engaged in a Microsoft Dynamics AX implementation project. Basic knowledge of financial terms, concepts, and Microsoft Dynamics AX terminologies is required.

Who is this book for?

This book is intended for application consultants, controllers, CFOs, and other professionals who are engaged in a Microsoft Dynamics AX implementation project. Basic knowledge of financial terms, concepts, and Microsoft Dynamics AX terminologies is required.

What you will learn

  • Examine the business logic behind the financial functionalities of Microsoft Dynamics AX 2012 R3
  • Set up and configure the core modules of financial management
  • Grasp the key control points of financial management
  • Plan and execute an opening balance migration
  • Implement the monthly and yearend closing procedures
  • Explore the basic cycles and module integrations
  • Discover and implement the inventory costing mechanism
  • Use Microsoft Dynamics AX to create financial reports

Product Details

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Publication date, Length, Edition, Language, ISBN-13
Publication date : Feb 13, 2015
Length: 352 pages
Edition : 1st
Language : English
ISBN-13 : 9781784391522
Vendor :
Microsoft
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Product Details

Publication date : Feb 13, 2015
Length: 352 pages
Edition : 1st
Language : English
ISBN-13 : 9781784391522
Vendor :
Microsoft
Category :
Languages :

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Table of Contents

11 Chapters
1. Getting Started with Microsoft Dynamics AX 2012 Chevron down icon Chevron up icon
2. Understanding the General Ledger Chevron down icon Chevron up icon
3. Understanding Cash and Bank Management Chevron down icon Chevron up icon
4. Understanding Accounts Payable Chevron down icon Chevron up icon
5. Understanding Accounts Receivable Chevron down icon Chevron up icon
6. Exploring Fixed Assets Chevron down icon Chevron up icon
7. Functioning of Cash Flow Management Chevron down icon Chevron up icon
8. Working with Cost Management Chevron down icon Chevron up icon
9. Exploring Financial Dimensions Chevron down icon Chevron up icon
10. Exploring Financial Reporting and Analysis Chevron down icon Chevron up icon
Index Chevron down icon Chevron up icon

Customer reviews

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Rating distribution
Full star icon Full star icon Full star icon Full star icon Half star icon 4.1
(16 Ratings)
5 star 43.8%
4 star 31.3%
3 star 18.8%
2 star 0%
1 star 6.3%
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gcc Spain Mar 25, 2015
Full star icon Full star icon Full star icon Full star icon Full star icon 5
Fantastic book to review and understand Ax financial modules. It presents topics in an easy and understandable way, concepts are really clear. I'd highlight process charts and descriptions, really helpful.
Amazon Verified review Amazon
DNAunion Mar 26, 2015
Full star icon Full star icon Full star icon Full star icon Full star icon 5
I have the first edition and bought this one for R3 mainly because it has twice as many pages. There is a lot of additional, new information. This is a huge improvement over the first edition.
Amazon Verified review Amazon
Tahir Aziz Mar 10, 2015
Full star icon Full star icon Full star icon Full star icon Full star icon 5
This is an excellent book for consultants, not only for understanding basic accounting/finance topics but as well as it is very easy and handy user guide for design and implementation phase of the MS Dynamics AX system. The topics explained in this book are very easy to understand both from concept as well as software point of view. Specially, "Cash Flow Forecast" is a topic which I never fully understood by myself, but in this book, I now can claim that I understand this topic very well.Thanks Mohamed Aamer (AX - MVP) for continuing on your efforts, and I pray for all your future success.
Amazon Verified review Amazon
Lin Mar 10, 2015
Full star icon Full star icon Full star icon Full star icon Full star icon 5
As an AX Technical Consultant, I do like this book. It is very usefull for a TC to understand Financial business.It is really helpfull for me to understand what Founctional consultants talk about.
Amazon Verified review Amazon
Rambo Dec 19, 2017
Full star icon Full star icon Full star icon Full star icon Full star icon 5
Good book. This is the only book available in the market for preparing for the certification exam.Thanks to Author. I hope the author also comes out with another book with model questions, answers and explanations to help students.
Amazon Verified review Amazon
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