After a number of years of implementing D365 and AX into large businesses, a thought has been at the back of my mind which was recently brought into sharp focus. That thought? Just how much simpler work life has become since modern ERP systems revolutionised month end processing.
A few years ago I was the financial accountant for a chemical manufacturing company. Part of my role involved the co-ordination and reporting of ‘month-end’ results for two companies, with a combined turnover of over £1.8bn.
Each company had its own accounting software, each with its own unique processes and configuration. The transactions would be posted throughout the month, and various reports would be generated at month-end. Agreeing inter-company balances would seem to take forever, with the obligatory accruals and adjustments to account for missing or late invoices. Then the laborious task of consolidating the results into Hyperion would need to take place.
Don’t even get me started on investigating discrepancies and variances…
Early starts, late nights - that dreaded month end…
For any accountant working in a large business, these tasks will seem very familiar and if you are anything like me, you dreaded the pressure and additional hours needed to achieve the month-end deadlines for group reporting. It was five days of early starts, late nights and no lunch.
We will always have month-end, so how can a modern ERP system, such as D365 F&O help us?
Microsoft Dynamics 365 for Finance and Operations (D365 F&O) can be configured to allow multiple legal entities to exist in the same platform. Inter-company transactions are completed in real-time, eliminating the chance of one company balance not agreeing with another.
Users in Company A can exact the same processes as those in Company B, meaning that training users becomes a lot easier and quicker. Transactions are posted in a far more consistent manner, making your auditors much happier.
There is also the ability for different entities within a group to apply individual policies regarding Chart of Accounts, Expenses claims by employees and Terms of payment to name but a few. This can be particularly useful with businesses with a large geographical spread around the world.
There is a ‘shared service’ facility, which allows a single user-group to make payments or register Purchase invoices on behalf of all companies within the group. We all know the implications of making the best use of cash, so cash-flow forecasting becomes a lot more predictable. An example of the type of ‘snap-shot’ information available to the user is shown below:
As all processes are the same across the group, the ability to investigate any queries becomes a simpler task too. In fact, with the help of Power BI, variances can actually be sent to your inbox, meaning you don’t have to go looking for them.
The cherry on the cake
For me, the ‘cherry on the cake’ is the fact that we can set up a ‘Consolidation’ entity, meaning that transactions from all group companies are combined into single set of monthly and year-end results, eliminating the need for a 3rd part consolidation tool.
In my experience, a typical five-day month end cycle can be reduced to about half of that. The only limit is how much stress you do or don’t want. The free-time created can be spent on the value-added activities such as better forecasting, better budgeting, better market analysis, better supplier management… the list goes on.
I have just scratched the surface on how D365 F&O can help your finance function. In future posts I will highlight some other aspects that can be improved within your business, and therefore make life at work much more enjoyable and rewarding.
If you feel that your organisation could benefit from any of the time saving features I have described, please take a look at our dedicated Microsoft D365 F&O web page and feel free to contact us for a no-obligation demonstration.