Microsoft D365 | 2023 Release Wave 2 Fixed and Variable G/L Allocations (Demo)

In the 2023 Release Wave 2, Microsoft introduced new functionality for Dynamics 365 Business Central: the ability to utilize fixed allocations, variable allocations, and allocation templates. This long-awaited feature, now integrated directly into Dynamics BC, eliminates the need for add-ins and is readily available for use. Let’s explore how it integrates with transactions in the general ledger and delve into its setup. So, let’s begin.

Exploring Fixed Allocations

Office Rent Allocation

Within the general journal entry I’ve prepared, there are multiple allocations. The first, concerning Office Rent, employs a fixed allocation method, distributing rent based on fixed percentages for various departments. Let’s examine them individually. The setup is already complete, with a new account type called “allocation account” and a specific allocation name. You’ll notice a dropdown menu with various allocations available for selection. The account name is “office rent,” accompanied by a dollar amount representing an invoice entry on the general journal. We can preview the results by running a post-preview. Upon examining the general ledger entry, we observe the allocations being made to rent expense across the three departments. Now, let’s review the setup for this.

Setup for Fixed Allocations

Within the allocation accounts, I’ve configured different allocation types, with the first being for office rent, designated as a fixed account type. Upon opening it, you’ll find the fixed allocation setup, with simple percentages assigned to each department. These percentages can be easily adjusted according to your requirements.

Examining Variable Allocations

Fire and Property Insurance Allocation

Moving on to the second allocation in my journal entry, it utilizes a variable allocation method based on non-financial accounts present in Business Central. Let’s take a closer look at it. Upon filtering, we find six entries, allocating fire and property insurance to different locations. Now, let’s examine the corresponding allocation account. This is the variable allocation, specifying the account number to be used and utilizing location data from a statistical account named “square footage.” The breakdown account options include GL accounts, bank accounts, or statistical accounts, depending on the setup. Let’s proceed with reviewing the setup. I’ve applied a filter to ensure that each line corresponds to a specific location code. By setting dimensions for each line, the system calculates the allocation based on the statistical account’s data, distributing it by percentage at the current balance.

Leveraging Allocation Templates

Inherit from Parent Allocation

The subsequent two allocations utilize the same methods but are not bound to specific account numbers; instead, they serve as templates for new allocations within the general ledger. Microsoft refers to this template allocation as an “inherit from parent” allocation, which essentially creates a template based on existing allocations in the system. For instance, I’ve configured two lines for utilities expense and repairs and maintenance expense, with specified amounts. Although this remains a standard journal entry, I’ve specified an allocation account number to link it with existing allocations. This method allows me to avoid setting up separate allocations for individual account numbers by leveraging existing ones as templates. Let’s review it. Returning to the allocation accounts, we find two entries based on the previously mentioned methods. The calculations mirror those of the fixed allocation for office rent. Opening one of them reveals its setup as an “inherit from parent” template, with fixed amounts defined. Similarly, the variable template is configured to utilize a specified statistical account. By setting up dimensions and filters, this allocation can be applied universally across different accounts, streamlining the process significantly.

Conclusion

In conclusion, we’ve demonstrated how Microsoft has enhanced Dynamics 365 Business Central with the ability to implement fixed and variable allocations, along with the functionality to create templates for use across various accounts. This feature represents a significant advancement in financial accounting capabilities and is certainly worth exploring and implementing.