Dynamics Ax 2012 R3 financial concept for the beginner

1. 1
Dynamics AX Finance Concepts - For Beginners Part 1

2. 2
Dynamics AX Finance Module – For Beginners

3. Agenda
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•Setting Up Currencies and Exchange Rate.
•Creating Period in Fiscal Year.

4. General Setup
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Dynamics AX Finance
Module General
Ledger Setup

5. Introduction
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• A general ledger (GL) is a formal ledger that contains a
company's accounting records.
• To make the general ledger functional, you need to:
Setup Currency
Setup the chart of accounts
Fiscal calendars
Legal entities
Etc.

6. Currency And Exchange Rate Setup
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• Currency setup is a mandatory step in Microsoft
Dynamics® AX and is used to record financial
transactions.
• Multi-currency functionality may be used if your
company does business in more than one currency.

7. Currency setup in Dynamics Ax 2012
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• General ledger: Click setup, click currency, and then
click currencies.
• Reference currency for triangulation

8. Triangulation
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• Many spot currency cross pairs are not traded against each other
in the interbank market as standard pairs.
• Triangulation is a strategy whereby a trader exploits the
relationship between three currencies, as three pairs.

9. Example
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You have a subsidiary company in KSA, while your primary
company is in Egypt. When running reports you want to
see the results of the business operations in Egyptian
Pound(EGP). To accomplish this, you must convert your
Egyptian (EGP) to SAR. The system uses the exchange rate
defined on the Exchange rates form to convert the
amounts for reporting purposes.

10. Procedure: Set Rounding Options
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• From the Currencies form, select a currency.
• Tab to the Rounding Rules section.
• Round the sums according to a fixed unit for general transaction
amounts.
• For example, amounts on transactions are rounded to the nearest
unit (to 0.01). Specify the general unit for rounding in the General
round-off field.
Rounding Option - Enter the unit for rounding amounts, such as
0.10 or 1.00.

11. Rounding Method
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• Normal - round up numbers 5 and higher and round
down numbers 4 and lower.
• Downward - round down all numbers.
• Rounding-up - round up all numbers.

12. Accounting and Reporting Currencies
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• Accounting Currency: The customary monetary unit of measure
used to record the converted monetary value of economic
transactions in ledger accounts. In previous releases of Microsoft
Dynamics AX, this was called the company currency.
• Reporting Currency: The monetary unit of measure used to
record the converted monetary value of economic transactions in
ledger accounts for financial and management reporting
purposes.

13. Procedure: Create Exchange Rate Types
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• To access the Exchange rates types form, click General
ledger, click Setup, click Currency, and then click
Exchange Rate Types.
• Click on the New button to create a new record.
• Enter the identification of the exchange rate type in the
Exchange Rate Type Field and a description in the
Name field.
• Save the record and close the form.

14. Procedure: Create Currency Exchange Rates
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• To access the Currency Exchange Rates form, click General Ledger,
click Setup, click Currency, and then click Currency Exchange
Rates or navigate from the Exchange Rate Type form.
• Select a Exchange Rate Type from the drop-down list.
• Click the New button.
• Define the necessary exchange rates between a currency pair by
selecting a currency in the From Currency and the To Currency
drop-down list.

15. Procedure: Create Currency Exchange Rates
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• Define the Quotation unit. Typically the system is based on either
one unit or one hundred units. If the field is set to one hundred
units, the exchange rate should specify the equivalent of one
hundred units of the foreign currency. For example, if the "From"
currency is U.S. dollars and the "To" currency is Euro, the exchange
rate should specify how many U.S. dollars equal one hundred
Euros.
• Select the date range by entering the From Date and a To Date in
the appropriate fields.

16. Procedure: Create Revaluation Accounts
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When running currency revaluation, exchange rate
differences may occur due to the change in
exchange rates. This is also used in the
customer/vendor settlement of payments and
invoices. Revaluation processes will generate
unrealized gain/loss amounts where the
settlement process will generate realized gain/loss
amounts.

17. Procedure: Create Revaluation Accounts
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• For each ledger define the main accounts, to account for changes
in exchange rate loss or gain. Perform the following steps to set
up ledger and currency specific exchange rate loss/gain accounts:
• Open General ledger, select Setup, select Currency, and then
select Currency Revaluation Accounts.
• Select the ledger in the Ledger field.
• Select a Currency and define the main accounts that will be
posted to for any unrealized and realized gains/losses for the
currency in that ledger.

18. Denomination Currencies
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• Add the currencies that are denominated as the triangulation
currency and should be triangulated through the triangulation
currency during the currency conversion process.

19. Periods and Fiscal Year Setup
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• The fiscal year in Microsoft Dynamics AX can be:
Set to any length
Divided into any number of periods
Shared across multiple legal entities
• Both fiscal year and periods can be set up by the following
measurements of time:
Years
Months
Days

20. Periods and fiscal year setup
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• Each period (at the ledger level) can be:
o Closed completely or put On Hold to block
transaction postings
o Set to enable selected users to continue an update of
one or more modules

21. Fiscal Year
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• A period that a company or government uses for
accounting purposes and preparing financial
statements.
• The fiscal year may or may not be the same as a
calendar year.

22. Fiscal Calendar
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• Fiscal calendars are shared across multiple legal entities. The benefits of sharing
fiscal calendars include:
o Supporting multiple fiscal calendars for each legal entity. For example:
Fixed assets may require two calendars one for auditing purposes and one
for tax purposes. Having multiple calendars allows you to run parallel
depreciations.
o Reduces the amount of setup required for each legal entity as it is possible
to use the same fiscal calendar for multiple legal entities.
o Before posting transactions, a new fiscal year must be divided into periods
as transactions cannot post unless a period is created for the posting date.

23. Scenario
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The Accounting Manager, wants to define calendars for
different purposes and share them across different
ledgers without having to create them in each legal entity.

24. Procedure: Create Shared Fiscal Calendar
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• Click General Ledger, click Setup, and then click Fiscal Calendar.
• Click the New Fiscal Calendar button.
• Enter the name of the calendar to be created in the Calendar field.
• Enter a description of the fiscal calendar in the Description field. This description may
print on reports.
• Enter the Start and End dates of the initial fiscal year in the appropriate fields.
• Enter a Fiscal Year Name of the initial fiscal year to be associated with this fiscal
calendar.
• Enter the Length of the period and the Unit of the periods. These fields work together
to determine how many periods will be created.
• Click the Create button.

25. Periods Types
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• Opening - the period can be used to record opening
balances from the previous period.
• Operating - the period can be used to record
accounting transactions.
• Closing - the period can be used to record general
ledger transactions for closing a fiscal period.

26. Review New Period
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• An opening period with the Type of Opening.
• A number of periods (or period) with the Type of
Operating.
• A closing period with the Type of Closing.

27. Modifying Fiscal Calendar
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To divide an existing period into two periods, click the Divide Period button. Enter the
start date of the new period, and then click OK to create the new period and return to the
Periods form.
To create a closing period for a fiscal period, click the Create Closing Period button. The
system automatically creates an opening and closing period for the fiscal year, but not for
each individual period.
To delete period with an Operating Status click the Delete button. The Delete button is
not available if the selected fiscal period has a status of Opening. No warning or error
message appears when an open period with transaction history is deleted. The transactions
are not deleted, and the end date of the period prior to the deleted period changes to
coincide with the beginning date of the next period.

28. Contact
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Mass Tech For Business Consulting and Dynamics ax Coerces:-
• Email: Mastechenology@gmail.com
• Twitter: @MassTechnolo
• LinkedIn: Mass Technology
• MobilePhone:00201121102666
Financial Concept For the Beginer Part 1