Dynamics Ax 2012 R3 financial concept for the beginer part 1
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This document provides an overview of setting up finance concepts in Dynamics AX for beginners. It discusses setting up currencies and exchange rates, creating periods in the fiscal year, and general ledger setup. Key steps include defining currencies, exchange rate types, currency exchange rates, revaluation accounts, fiscal calendars, and periods. The goal is to configure these finance concepts to record transactions accurately across legal entities and currencies.
Dynamics Ax 2012 R3 financial concept for the beginer part 1
- 1. 1 Dynamics AX Finance Concepts - For Beginners Part 1
- 2. 2 Dynamics AX Finance Module – For Beginners
- 3. Agenda 3 •Setting Up Currencies and Exchange Rate. •Creating Period in Fiscal Year.
- 4. General Setup 4 Dynamics AX Finance Module General Ledger Setup
- 5. Introduction 5 • A general ledger (GL) is a formal ledger that contains a company's accounting records. • To make the general ledger functional, you need to: Setup Currency Setup the chart of accounts Fiscal calendars Legal entities Etc.
- 6. Currency And Exchange Rate Setup 6 • Currency setup is a mandatory step in Microsoft Dynamics® AX and is used to record financial transactions. • Multi-currency functionality may be used if your company does business in more than one currency.
- 7. Currency setup in Dynamics Ax 2012 7 • General ledger: Click setup, click currency, and then click currencies. • Reference currency for triangulation
- 8. Triangulation 8 • Many spot currency cross pairs are not traded against each other in the interbank market as standard pairs. • Triangulation is a strategy whereby a trader exploits the relationship between three currencies, as three pairs.
- 9. Example 9 You have a subsidiary company in KSA, while your primary company is in Egypt. When running reports you want to see the results of the business operations in Egyptian Pound(EGP). To accomplish this, you must convert your Egyptian (EGP) to SAR. The system uses the exchange rate defined on the Exchange rates form to convert the amounts for reporting purposes.
- 10. Procedure: Set Rounding Options 10 • From the Currencies form, select a currency. • Tab to the Rounding Rules section. • Round the sums according to a fixed unit for general transaction amounts. • For example, amounts on transactions are rounded to the nearest unit (to 0.01). Specify the general unit for rounding in the General round-off field. Rounding Option - Enter the unit for rounding amounts, such as 0.10 or 1.00.
- 11. Rounding Method 11 • Normal - round up numbers 5 and higher and round down numbers 4 and lower. • Downward - round down all numbers. • Rounding-up - round up all numbers.
- 12. Accounting and Reporting Currencies 12 • Accounting Currency: The customary monetary unit of measure used to record the converted monetary value of economic transactions in ledger accounts. In previous releases of Microsoft Dynamics AX, this was called the company currency. • Reporting Currency: The monetary unit of measure used to record the converted monetary value of economic transactions in ledger accounts for financial and management reporting purposes.
- 13. Procedure: Create Exchange Rate Types 13 • To access the Exchange rates types form, click General ledger, click Setup, click Currency, and then click Exchange Rate Types. • Click on the New button to create a new record. • Enter the identification of the exchange rate type in the Exchange Rate Type Field and a description in the Name field. • Save the record and close the form.
- 14. Procedure: Create Currency Exchange Rates 14 • To access the Currency Exchange Rates form, click General Ledger, click Setup, click Currency, and then click Currency Exchange Rates or navigate from the Exchange Rate Type form. • Select a Exchange Rate Type from the drop-down list. • Click the New button. • Define the necessary exchange rates between a currency pair by selecting a currency in the From Currency and the To Currency drop-down list.
- 15. Procedure: Create Currency Exchange Rates 15 • Define the Quotation unit. Typically the system is based on either one unit or one hundred units. If the field is set to one hundred units, the exchange rate should specify the equivalent of one hundred units of the foreign currency. For example, if the "From" currency is U.S. dollars and the "To" currency is Euro, the exchange rate should specify how many U.S. dollars equal one hundred Euros. • Select the date range by entering the From Date and a To Date in the appropriate fields.
- 16. Procedure: Create Revaluation Accounts 16 When running currency revaluation, exchange rate differences may occur due to the change in exchange rates. This is also used in the customer/vendor settlement of payments and invoices. Revaluation processes will generate unrealized gain/loss amounts where the settlement process will generate realized gain/loss amounts.
- 17. Procedure: Create Revaluation Accounts 17 • For each ledger define the main accounts, to account for changes in exchange rate loss or gain. Perform the following steps to set up ledger and currency specific exchange rate loss/gain accounts: • Open General ledger, select Setup, select Currency, and then select Currency Revaluation Accounts. • Select the ledger in the Ledger field. • Select a Currency and define the main accounts that will be posted to for any unrealized and realized gains/losses for the currency in that ledger.
- 18. Denomination Currencies 18 • Add the currencies that are denominated as the triangulation currency and should be triangulated through the triangulation currency during the currency conversion process.
- 19. Periods and Fiscal Year Setup 19 • The fiscal year in Microsoft Dynamics AX can be: Set to any length Divided into any number of periods Shared across multiple legal entities • Both fiscal year and periods can be set up by the following measurements of time: Years Months Days
- 20. Periods and fiscal year setup 20 • Each period (at the ledger level) can be: o Closed completely or put On Hold to block transaction postings o Set to enable selected users to continue an update of one or more modules
- 21. Fiscal Year 21 • A period that a company or government uses for accounting purposes and preparing financial statements. • The fiscal year may or may not be the same as a calendar year.
- 22. Fiscal Calendar 22 • Fiscal calendars are shared across multiple legal entities. The benefits of sharing fiscal calendars include: o Supporting multiple fiscal calendars for each legal entity. For example: Fixed assets may require two calendars one for auditing purposes and one for tax purposes. Having multiple calendars allows you to run parallel depreciations. o Reduces the amount of setup required for each legal entity as it is possible to use the same fiscal calendar for multiple legal entities. o Before posting transactions, a new fiscal year must be divided into periods as transactions cannot post unless a period is created for the posting date.
- 23. Scenario 23 The Accounting Manager, wants to define calendars for different purposes and share them across different ledgers without having to create them in each legal entity.
- 24. Procedure: Create Shared Fiscal Calendar 24 • Click General Ledger, click Setup, and then click Fiscal Calendar. • Click the New Fiscal Calendar button. • Enter the name of the calendar to be created in the Calendar field. • Enter a description of the fiscal calendar in the Description field. This description may print on reports. • Enter the Start and End dates of the initial fiscal year in the appropriate fields. • Enter a Fiscal Year Name of the initial fiscal year to be associated with this fiscal calendar. • Enter the Length of the period and the Unit of the periods. These fields work together to determine how many periods will be created. • Click the Create button.
- 25. Periods Types 25 • Opening - the period can be used to record opening balances from the previous period. • Operating - the period can be used to record accounting transactions. • Closing - the period can be used to record general ledger transactions for closing a fiscal period.
- 26. Review New Period 26 • An opening period with the Type of Opening. • A number of periods (or period) with the Type of Operating. • A closing period with the Type of Closing.
- 27. Modifying Fiscal Calendar 27 To divide an existing period into two periods, click the Divide Period button. Enter the start date of the new period, and then click OK to create the new period and return to the Periods form. To create a closing period for a fiscal period, click the Create Closing Period button. The system automatically creates an opening and closing period for the fiscal year, but not for each individual period. To delete period with an Operating Status click the Delete button. The Delete button is not available if the selected fiscal period has a status of Opening. No warning or error message appears when an open period with transaction history is deleted. The transactions are not deleted, and the end date of the period prior to the deleted period changes to coincide with the beginning date of the next period.
- 28. Contact 28 Mass Tech For Business Consulting and Dynamics ax Coerces:- • Email: Mastechenology@gmail.com • Twitter: @MassTechnolo • LinkedIn: Mass Technology • MobilePhone:00201121102666 Financial Concept For the Beginer Part 1