Microsoft Dynamics 365 for Operations takes a new approach in cost accounting.
The implementation of the new module takes place in several phases – and already in the first phase, the extensive functions for the collection, preparation, structuring and processing of financial and operational data are convincing.
In the presentation of the information and key data from the cost accounting, Microsoft relies entirely on technologies that have largely proved their worth in the controlling department – so the user can display the cost accounting data in the Dynamics 365 Workspace for cost control and analyzes these in Excel pivot tables or in Microsoft Power BI dashboards.
In cost management, all master data and parameterizations are summarized, which are relevant for the article and warehouse valuation as well as for the integration of the other modules (such as logistics, production or project) into the general ledger.
In addition, new reporting options are also available in cost analysis as well as in costing, examples are:
- Inventory values and WIP over time
- Comparison of active article costing with the production estimation costing and costings
The functionality of cost controlling will serve as a basis for futher functions on the future. The current basic functionality is comprised of:
- High flexibility in the structuring of work areas, cost elements and cost objects
- a policy-defined, well-comprehensible processing of volume and value flows
The new cost accounting is strongly integrated in Microsoft Dynamics 365 for Operations, but still works largely independently. It can also work with financial accounting systems from other manufacturers. Therefore, extensive import functions are available – in particular, financial data from earlier Microsoft Dynamics AX versions are also easy to read.
Transactions between legal entities can now be merged into a “cost accounting account”. Differences in the parameterization of the integrated enterprises, e.g. differing accounting currencies, chart of accounts or financial dimension are considered by their own exchange rate types as well as by a mapping of dimensions. Cost elements (cost elements) and cost objects (for example, cost centers) can be imported or adopted and hierarchically structured in different ways:
Hierarchy of Cost Elements:
Hierarchy of Cost Objects:
These hierarchies form the basis for the subsequent processing of the value and volume transactions.
Flexible rules and policies define:
- The cost behavior – the fixed and variable fractions of acquisition
- The overhead costs
- The procedures for internal activity allocation: cost distribution, cost breakdown and cost allocation
Statistical units of measure can be used as a basis for internal cost allocation.
The values for the statistical units of measurement can either be imported from Excel templates or imported from the operating modules of Microsoft Dynamics 365 for Operations – the latter, the definition is based on the source tables based on work templates (providers).
With this flexible method, various types of master data and movement data from all operational areas can be included as statistical units of measure in cost accounting – e.g. the number of employees per cost center or the posted production hours on articles. This can be used as a basis for cost allocations as well as a component of key data.
After the processing of actual or budget data, the defined evaluations are made available at the level of the cost objects to the responsible persons (for example, the cost center manager) in the work area of the cost accounting. Drill-down functions also allow an appropriate representation of the underlying transactions as well as a good traceability of the periodic values for actual and plan as well as their deviations.
In addition to a clear presentation of the costing account data in the work area, further analysis can be performed in Microsoft Excel. The data is provided via predefined templates. Pivot tables, conditional formatting, and graphics support data processing.
The presented functions of the new cost accounting represent only the beginning of the journey into the exciting future of controlling in Microsoft Dynamics 365 for Operations.
We are happy and proud to take part in this journey – our close cooperation with the Microsoft product management provides us with many insights in the many features and options for controlling that are still planned, and for which the basis has now been layed.
We also help you as a companion and sparring partner on this journey – we would be glad to give you more detailed insights into the modern world of cost accounting!
ERP systems should be used for controlling first and foremost – contact us, in case of questions on cost accounting with Microsoft Dynamics 365!