Na2009 enus fin_01

Chapter 1: Financial Management Setup

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CHAPTER 1: FINANCIAL MANAGEMENT SETUP Objectives

The objectives are:

• Explain the fields on the General Ledger Setup window. • Explain and set up Accounting Periods. • Explain and set up Trail Codes, Source Codes, and Reason Codes.

Introduction Financial Management Setup describes in detail each area that needs to be set up to use financials in Microsoft Dynamics® NAV 2009.

• General Ledger • Accounting Periods • Trail Codes, including:

o Source Codes o Reason Codes

NOTE: There are other setup areas in the General Ledger, such as Currencies, No. Series, Dimensions, and Posting Groups. The setup of these areas is discussed in the Application Setup Microsoft Dynamics® NAV 2009 courseware.

Microsoft Official Training Materials for Microsoft Dynamics ® Your use of this content is subject to your current services agreement

Financials in Microsoft Dynamics® NAV 2009

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General Ledger Setup The General Ledger Setup window is used to specify default setting for the general ledger and all finance related application areas. The General Ledger Setup window must be completed for each company that is set up in Microsoft Dynamics NAV 2009.

The five FastTabs on the General Ledger Setup window are:

• General • Numbering • Dimensions • Reporting • Application

To access the General Ledger Setup window:

• Select the Departments button in the Navigation Pane. • Select Administration and click Application Setup. • Click Financial Management and then select Finance. • In the Finance window, under Tasks, select General Ledger Setup.

FIGURE 1.1 GENERAL LEDGER SETUP, GENERAL FASTTAB



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General FastTab

The General FastTab contains the basic setup defaults for General Ledger and has the following fields:

• Allow Posting From / Allow Posting To - Specify the company default posting dates; that is, the date range that all users can post transactions in. Because a period closing process is not required in Microsoft Dynamics NAV 2009, setting the posting date range prevents users from posting entries that can change prior period data.

NOTE: Specific user posting date restrictions are specified in the User Setup window. If there are no user restrictions, the company defaults are in effect. If there are no company defaults, there are no restrictions on dates for data entry and posting

• Register Time - Specify whether the system registers the user's time usage.

• Local Address Format - Specify the address format that is used on printed documents

• Local Cont. Addr. Format - Specify where the contact name has to appear in mailing addresses.

FIGURE 1.2 GENERAL LEDGER SETUP, GENERAL FASTTAB



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• Invoice Rounding Precision (LCY) - Specify the size of the interval to be used when users are rounding amounts in local currency (LCY).

• Invoice Rounding Type (LCY) - Specify if invoice amounts are rounded up or down. The option selected here is used with the rounding interval specified in the Invoice Rounding Precision (LCY) field.

• Allow G/L Acc. Deletion Before - The date in this field determines whether and when G/L accounts can be deleted. G/L accounts that have entries on or after the date specified in this field cannot be deleted.

• Check G/L Account Usage - If selected, the system prevents G/L accounts that are used in setup tables, such as posting groups, from being deleted.

• EMU Currency - Select this field if LCY is an EMU currency. Use this field only when applying entries in different currencies.

• LCY Code - Enter the currency code for LCY. The value is only used on printouts because the system uses <Blank> as the indicator for LCY when displaying information in tables.

• Pmt. Disc. Excl. VAT - Specify whether the payment discount is based on amounts including or excluding VAT.

• Adjust for Payment Disc. - If selected, the system recalculates VAT amounts when you are posting payments that trigger payment discounts.

• Unrealized VAT - Specify whether the system manages unrealized VAT.

• Prepayment Unrealized VAT - Specify whether the system manages prepayments for unrealized VAT.

• Max. VAT Difference Allowed - Enter the maximum VAT correction amount allowed for the local currency.

• VAT Rounding Type - Select how VAT is rounded when it is calculated for the local currency.

• Bill-to/Sell-to VAT Calc. - By default, this field is set to Bill-to/Pay-to No., which indicates that the VAT Business Posting Group is taken from the Bill-to customer or Pay-to vendor for orders/invoices. Select Sell-to/Buy-from No. to use the VAT Business Posting Group for the Sell-to customer or Buy-from vendor for orders/invoices.

• Print VAT Specification in LCY - If selected, a line is added on printed sales documents that specifies the VAT details in LCY, in addition to the invoicing currency. When not selected, VAT details will only print in the invoicing currency.



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Numbering FastTab

Bank Account Nos. is the only field on the Numbering FastTab. In this field, enter the code for the number series that will be used to assign numbers to bank accounts.

FIGURE 1.3 GENERAL LEDGER SETUP, NUMBERING FASTTAB

No. Series are described and set up in the Application Setup in Microsoft Dynamics® NAV 2009 courseware.

Dimensions FastTab

The Dimensions FastTab, specify the global and the shortcut dimensions to be used for financial reporting.



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The codes specified here are selected from the dimensions set up in the Dimension table, as described in the Dimensions section in the Application Setup in Microsoft Dynamics NAV 2009 courseware.

FIGURE 1.4 GENERAL LEDGER SETUP, DIMENSIONS FASTTAB

Global dimensions can be used as filters for G/L entries or on all reports, account schedules, and batch jobs.

Determine which two dimensions are likely to be analyzed most frequently and select these as the two global dimensions.

Shortcut dimensions offer a fast and convenient way to enter dimension information directly on the line in journals, sales and purchase documents. The system automatically creates the first two shortcut dimensions by using the Global Dimensions. The other six shortcut dimensions are available only if Advanced Dimensions are purchased.



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Global Dimensions

To change the Global Dimensions, click Actions, point to Functions and then select Change Global Dimensions

FIGURE 1.5 CHANGE GLOBAL DIMENSIONS

Use the drop-down list to change one or both of the global dimensions and then click OK to run the Change Global Dimensions batch job.

NOTE: Changing a global dimension code requires that the system change entries already posted. Carefully consider which dimension codes are designated as a global dimension to minimize the need for future changes.

Payment Tolerance

To change the Payment Tolerance, click Actions, point to Functions and then select Change Payment Tolerance

FIGURE 1.6 CHANGE PAYMENT TOLERANCE

The options for Change Payment Tolerance are:

• All Currencies: Insert a check mark to change the tolerance setup for both local and all foreign currencies.

• Currency Code: Enter the code of the currency for which to change the tolerance setup.



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• Payment Tolerance %: Enter the percentage by which the payment or refund can be less than the amount on the invoice or credit memo.

• Max. Payment Tolerance: Enter the maximum amount that the payment or refund can differ from the amount on the invoice or credit memo.

Reporting FastTab

The Reporting FastTab is used to determine whether and how additional reporting currency is used. Additional reporting currency is used when transaction information also must be available in a currency other than local currency.

FIGURE 1.7 GENERAL LEDGER SETUP, RAPORTING FASTTAB

The fields on the Reporting FastTab are as follows:

• Additional Reporting Currency - Specify the currency used as an additional reporting currency in the General Ledger area. If specified: o G/L and other entries that include VAT entries in both LCY and

additional reporting currency are automatically recorded. o Reports are printed in either LCY or the additional reporting

currency

• VAT Exchange Rate Adjustment - Used with the Additional Reporting Currency field to specify how the accounts set up for VAT posting in the VAT Posting Setup table are adjusted for exchange rate fluctuations between LCY and the additional reporting currency.

Application FastTab

The fields on the Application FastTab are used to specify:

• Currency rounding tolerance



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• How payments are applied to outstanding amounts. This includes the following: o Payments from customers o Payments to vendors

FIGURE 1.8 GENERAL LEDGER SETUP, APPLICATION FASTTAB

The Application FastTab contains the following fields:

• Appln. Rounding Precision - Specify the size of the interval for rounding difference for LCY when applying LCY entries to entries in a different currency.

• Payment Disc. Tolerance Warning, Payment Disc. Tolerance Posting, and Payment Discount Grace Period - Complete these fields to allow for tolerance on payment discount terms. More information about payment discount tolerance is available in the Receivables Management and Payables Management chapters in this Finance content.

• Payment Tolerance Warning and Payment Tolerance Posting - Complete these fields to close outstanding receivables and payables with payment amounts that differ from what is owed. More information about payment tolerance is available in the Receivables Management and Payables Management chapters in this Finance content.

• Payment Tolerance % - enter the percentage that the payment or refund can be less than the amount on the invoice or credit memo.

• Max. Payment Tolerance Amount - enter the maximum amount that the payment or refund can differ from the amount on the invoice or credit memo.



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Test Your Knowledge: General Ledger Setup Task Page

The following are characteristics of the General Ledger Setup window. Match the characteristic to the elements on General Ledger Setup window.

_____ 1. Contains only one field. _____ 2. Prevent entries that can change prior period data. _____ 3. Used to specify two globals and up to eight shortcuts. _____ 4. A function can be run to change this. _____ 5. LCY is the acronym for this. _____ 6. Determine whether and how additional reporting currency is used.

a. Allow Posting From / Allow Posting To fields

b. Dimensions FastTab c. Local Currency d. Numbering FastTab e. Reporting FastTab f. Payment Tolerance

Accounting Periods Before you can post in a fiscal year in Microsoft Dynamics NAV 2009:

• The fiscal year must be opened. • Accounting periods must be defined.

The shortest possible accounting period is one day and at least one accounting period must be set up for each fiscal year.

The Accounting Periods window is used to:

• Open new fiscal years • Define accounting periods • Close fiscal years

Accounting periods can be used as a time reference in Microsoft Dynamics NAV 2009. For example, when you are reviewing posted entries in a Balance/Budget window, the length of the accounting period, such as one month or one quarter, is specified.

Set Up an Accounting Period Manually

Accounting Periods can be created by using one of the following methods:

• Manually • Automatically, by using the Create Fiscal Year batch job.



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To manually set up an Accounting Period, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Finance.

2. In the Finance window, under Lists, select Accounting Periods. 3. Click New.

FIGURE 1.9 ACCOUNTING PERIODS WINDOW

4. In the Starting Date field, enter the date that the accounting period begins.

5. In the Name field, the system automatically updates the name of the month that corresponds to the Starting Date.

6. Select the New Fiscal Year check box to indicate the start of the year.

7. Repeat steps 4-5 for each month in the period.

The New Fiscal Year check box must contain a check mark if an accounting period is the first one in a fiscal year. Microsoft Dynamics NAV 2009 uses that period to determine which periods to close when the Close Year function is run.



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Set Up an Accounting Period Automatically

To run the Create Fiscal Year batch job, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Finance.

2. In the Finance window, under Lists, select Accounting Periods. 3. Click Create Year.

FIGURE 1.10 CREATE FISCAL YEAR

4. In the Starting Date field, enter the date on which the fiscal year starts.

5. In the No. of Periods field, enter the number of accounting periods the fiscal year will be divided into. There can be from 1 to 365 periods.

6. In the Period Length field, enter how long each accounting period will be, for example, 1M = 1 month, 1Q = 1 quarter, and so on.

7. Click OK.

Inventory Periods and Closing the Year

The Accounting Periods window contains two other options that are discussed in other Microsoft Dynamics NAV 2009 content:

• Inventory Period • Close Year

Inventory periods are discussed and set up in Trade in Microsoft Dynamics NAV 2009 courseware. The Close Year process is discussed in the chapter Year End Closing Processes of this courseware.



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Reports

The Accounting Periods window also has the option to print a Trial Balance by Period. Select the option and enter the parameters for the report

FIGURE 1.11 TRIAL BALANCE BY PERIOD



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Lab 1.1 - Create a Fiscal Year Scenario

As the controller at CRONUS International Ltd., you have to create a new fiscal year for 2011. Quickly create the new year by using the following information:

• The fiscal year begins on February 1, 2011 and ends on the January 31, 2012.

• The length of an accounting period is a month.

Challenge Yourself!

Create the fiscal year for 2011 as specified in the scenario.

Need a Little Help?

1. Open the Accounting Periods window. 2. Open the Create Fiscal Year batch job. 3. Use the criteria that is specified in the scenario. 4. Run the batch job.

Step by Step

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then click Finance.

2. In the Finance window, select Accounting Periods. 3. Click Create Year. 4. In the Starting Date field, enter 2/1/2011. 5. In the No. of Periods field, enter 12. 6. In the Period Length field, enter 1M. 7. Click OK.



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Trail Codes Audit trails in Microsoft Dynamics NAV 2009 begin with Trail Codes. There are three elements to set up in relation to Trail Codes:

• Source Codes • Source Code Setup • Reason Codes

When a new company is set up, the Source Code and Source Code Setup tables are automatically populated. Reason Codes must be set up manually.

Source Codes

Entries are created in the financial statements when:

• Journals, orders, invoices, or credit memos are posted. • Various batch jobs are run.

Use Source codes to help find the point of origin for an entry. Source codes are the basis for the audit trail in Microsoft Dynamics NAV 2009 and are assigned to transactions and journals.

Microsoft Dynamics NAV 2009 provides source code system defaults. As new journals or data entry points are added, source codes have to be added to determine where the transaction originated.

System defaults and access to the posted entries for each source code are available from the Source Code window. To open this window and review the entries, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Trail Codes

2. Select Source Codes. 3. Select Related Information and point to Source to select the

relevant register.

Set up a new source code by selecting New and entering the new code and description in the line.

Source Code Setup

The Source Code Setup window is used to define or change source codes. Additionally, it contains several FastTabs, one for each application area. Each FastTab contains the source codes that are applicable for that application area.



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Typically, the default source code set up is not changed. However, if a different source code identification is required, the changes can be made from the Source Code Setup window.

To change a source code, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then click Trail Codes.

2. Click Source Code Setup.

FIGURE 1.12 SOURCE CODE SETUP

3. In the appropriate field, select the drop-down list. The Source Code window appears.

4. Select the new code in the Code field. 5. Press TAB or ENTER to commit the change to the field.

All the next posted entries will have the new source code.

Reason Codes

Reason codes are used to indicate why an entry was created. For example, if items from a sale must be returned, a reason code is set up to mark the reason, such as damaged, wrong color, or wrong size.



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Reason codes can be assigned on transactions, such as sales and purchase invoices, or to specific journal templates and journal batches.

When the codes are linked to a journal line or a sales or purchase header, Microsoft Dynamics NAV 2009 marks all entries with the reason code during posting. This allows for the posted ledger entries to be filtered by reason code.

To create reason codes, follow these steps:

1. Click the Departments button, click Administration, click Application Setup, click Financial Management and then Trail Codes.

2. Click Reason Codes. 3. Click New. 4. In the Code field, enter a unique identifier. 5. In the Description field, enter a short description of the Reason

Code. 6. Close the Reason Code window.

Navigate the Audit Trail

Sometimes, it may be necessary to trace information back to the entry source. Source Codes and Reason Codes are important pieces of this audit trail.

When activity is posted in Microsoft Dynamics NAV 2009, the transaction is assigned a Register Number, and each line within the transaction is assigned an Entry Number.

In addition to the Register Number, the following information is recorded for each transaction:

• Creation Date • User ID • Source Code • Journal Batch Name • If the journal was reversed • From Entry No. and To Entry No. • From VAT Entry No. and To VAT Entry No.

To open the window where this information is recorded, on the Navigation Pane, click the Departments button, click Financial Management, and then click General Ledger. In the General Ledger window, in the bottom of the window under History, select G/L Registers.

The G/L Register window is used to determine where transactions were posted in the system that is based on the assigned Source Code.



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In the Action Pane, the following sorting options are available:

• General Ledger • Customer Ledger • Vender Ledger • Reverse Register • Bank Account Ledger • Fixed Assets Ledger • Maintenance Ledger • VAT Entries

Test Your Knowledge: Trail Codes

Fill in the blanks to test your knowledge of this lesson.

7. Source Codes and Reason Codes are important parts of the _____ trail.

8. To view activity posted in Microsoft Dynamics NAV 2009, open the G/L ________ window.

9. ______ Codes identify where transactions originate. 10. ______ Codes are used to indicate why an entry was created. 11. To modify the default Source Codes used, changes are made to the

Source Code _____ window.

Summary Financial Management Setup describe the areas that must be set up to use Financial Management in Microsoft Dynamics NAV 2009.

The General Ledger Setup window, gives an quick and fast view of all the options there is in Microsoft Dynamics NAV 2009 when you have to setup the general ledger for a company.

Accounting periods helps manage to open and close the financial year, so all entries are in the correct periods.

Audit trails of Source Codes and Reason Codes gives the company a good documentation for the financial reporting.

The areas discussed in this content are the basis of the General Ledger Setup. There are many other areas that must be set up in Microsoft Dynamics NAV 2009, such as Posting Groups and Dimensions.



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Test Your Knowledge 1. Where are fiscal years defined?

( ) Fiscal Year window ( ) Accounting Periods window ( ) General Ledger Setup window ( ) Company Setup window

2. What is the basis of the audit trail in Microsoft Dynamics NAV 2009?

( ) Entry No. ( ) Reason Codes ( ) Source Codes ( ) Register No.

3. Where are posting restrictions set in Microsoft Dynamics NAV 2009? (Select all that apply)

( ) General Ledger Setup window ( ) Database or Windows Login window ( ) User Security window ( ) User Setup window

4. There are two types of dimensions specified in the General Ledger Setup Task Page. What are they? (Select all that apply)

( ) Department Dimensions ( ) Shortcut Dimensions ( ) Global Dimensions ( ) Project Dimensions

5. When activity is posted in Microsoft Dynamics NAV 2009, which of the following does the system assign to each transaction? (Select all that apply)

( ) Posting Date ( ) Register Number ( ) Creation Date ( ) Lines with Entry Numbers



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Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this chapter

1.

2.

3.



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Solutions General Ledger Setup

Test Your Knowledge: General Ledger Setup Task Page

The following are characteristics of the General Ledger Setup window. Match the characteristic to the elements on General Ledger Setup window.

d 1. Contains only one field. a 2. Prevent entries that can change prior period data. b 3. Used to specify two globals and up to eight shortcuts. f 4. A function can be run to change this. c 5. LCY is the acronym for this. e 6. Determine whether and how additional reporting currency is used.

a. Allow Posting From / Allow Posting To fields

b. Dimensions FastTab c. Local Currency d. Numbering FastTab e. Reporting FastTab f. Payment Tolerance

Trail Codes

Test Your Knowledge: Trail Codes

Fill in the blanks to test your knowledge of this lesson.

1. Source Codes and Reason Codes are important parts of the audit trail.

2. To view activity posted in Microsoft Dynamics NAV 2009, open the G/L Register window.

3. Source Codes identify where transactions originate.

4. Reason Codes are used to indicate why an entry was created.

5. To modify the default Source Codes used, changes are made to the Source Code Setup window.



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Test Your Knowledge

1. Where are fiscal years defined?

( ) Fiscal Year window (•) Accounting Periods window ( ) General Ledger Setup window ( ) Company Setup window

2. What is the basis of the audit trail in Microsoft Dynamics NAV 2009?

( ) Entry No. ( ) Reason Codes (•) Source Codes ( ) Register No.

3. Where are posting restrictions set in Microsoft Dynamics NAV 2009? (Select all that apply)

(√) General Ledger Setup window ( ) Database or Windows Login window ( ) User Security window (√) User Setup window

4. There are two types of dimensions specified in the General Ledger Setup Task Page. What are they? (Select all that apply)

( ) Department Dimensions (√) Shortcut Dimensions (√) Global Dimensions ( ) Project Dimensions

5. When activity is posted in Microsoft Dynamics NAV 2009, which of the following does the system assign to each transaction? (Select all that apply)

( ) Posting Date (√) Register Number (√) Creation Date (√) Lines with Entry Numbers


Na2009 enus fin_01

Technology

windows login

user security

payables management

financial

additional

fiscal years

click financial

trail codes