Book Image

Microsoft Dynamics 365 Enterprise Edition - Financial Management - Third Edition

By : Mohamed Aamer Ala El Din
Book Image

Microsoft Dynamics 365 Enterprise Edition - Financial Management - Third Edition

By: Mohamed Aamer Ala El Din

Overview of this book

Microsoft Dynamics 365 for finance and operations is a rapidly growing application and is widely used in enterprise organizations. Because of its ability to maximize business productivity, it is a fast-growing business application package in the ERP market. We will start by looking into ERP concepts, implementation needs, and interface design, giving you basic knowledge of financial management aspects and explaining key concepts along the way. To begin with, you'll be taken through the general ledger and financial dimension functions. You'll later learn about the sales tax mechanism and multi-currency in Microsoft Dynamics 365. We tackle each topic with focused examples and explanations on topics such as payable/receivable accounts, forecasting, cash and bank management, budgeting planning/control, and fixed assets. Finally, we walk you through intercompany, consolidation, costing basics, and financial reporting. By the end of this book, your finance team will have a much richer understanding of Microsoft Dynamics 365 for finance and operations and its powerful capabilities.
Table of Contents (24 chapters)
Title Page
Copyright and Credits
Dedication
Packt Upsell
Contributors
Preface
Index

Exploring intercompany accounting


Intercompany accounting represents the relationship among companies that are within the same group, normally enterprises having a holding company, and subsidiaries. The intercompany transactions are captured in the financial records of the subsidiaries that are involved in the intercompany.

There are several formats of intercompany transactions among the subsidiaries, and the following diagram illustrates these intercompany transactions formats:

As shown in the preceding diagram, there are three types, which can be explained as follows:

  • Upstream: An intercompany transaction flowing from the subsidiary to the parent
  • Downstream: An intercompany transaction flowing from the parent to the subsidiary
  • Lateral: An intercompany transaction flowing from one subsidiary to another subsidiary

In Microsoft Dynamics 365 for Finance and Operations, transactions posted in one legal entity lead to a related transaction to be posted automatically in the other company. Let's say...