Learn about improvements and new Dynamics 365 Finance features included as part of Microsoft’s 2021 Wave 1 release. These features cover many areas and focus heavily on automation, compliance, and intelligence capabilities.
Microsoft’s Dynamics 365 Finance is a core solution offered as part of Microsoft’s Dynamics 365 Finance and Operations application suite. Offering businesses a centralized financial management software solution, Dynamics 365 Finance is comprised of a comprehensive set of functions that include financial reporting in real-time, AI-driven insights, and embedded analytics. Dynamics 365 Finance drives agility and efficiency in organizations. Through enabling users to close books faster, ensure global compliance, and increase profitability using predictive intelligence, Dynamics 365 Finance creates impressive ROI for businesses. In 2018, Forrester conducted a study to determine the financial benefits of implementing Dynamics 365 Finance and Operations, determining a payback period of just 20 months and net benefits of over 40 million US dollars for the first 3 years. A significant factor in driving this ROI are the enhancements to financial performance Dynamics 365 Finance features offer.
As an evergreen cloud solution, Dynamics 365 consistently receives updates and new features. New features are presented to the public in wave releases that occur twice annually. In August, Microsoft released their Wave 1 of new features for Dynamics 365, including many new additions to Dynamics 365 Finance. New features focus heavily on improving automation and intelligence capabilities. This is backed by machine learning to enhance predictive capabilities. This article will elaborate on the new features announced by Microsoft and explain why we should all be excited about them!
As with all Dynamics 365 Wave releases, there are different levels of availability that products will fall under. These are private preview, public preview, and general availability. Private preview features are available to a limited number of users that apply to test them. These features are not covered by an SLA and cannot be moved into a production environment. Microsoft moves features into public preview when they need more users testing their product before being fully approved. General availability features have gone through sufficient testing, and can be used by anyone, for any purpose, in a production environment. The majority of features covered in this article will already be in general availability.
A focus of this Wave Release was the expanded use of AI and financial insights. Intelligent forecasting is valuable tool for any business to accurately predict their cash flow. Proactively improve your business’s cash flow with these new AI-driven features. It should be noted that all features in this section are still in public preview.
Forecasting is a helpful activity for any business. Predictability is essential for preparedness and the better your forecasting is, the better prepared you will have the opportunity to be. However, forecasting can be difficult for businesses with small datasets. A new cash flow forecasting feature allows the use of external data from supporting systems to be added for machine learning purposes to improve accuracy of forecasts in the cash flow engine.
A further benefit of the cash flow forecasting capability in Dynamics 365 Finance is the ability to forecast bank balance. Based on customer and vendor payments, as well as recurring payments, this function can forecast availability of funds at specific times. This is important for decision making and purchase timing.
Additionally, there will be a new “treasurer workspace” as part of cash flow forecasting that will include all essential elements for treasurers to complete their work within Dynamics 365 Finance.
Uncertainty around invoice payment times is a hindrance to collection activities. To help correct this, new prediction capabilities have been introduced. This helps companies determine when invoices will be paid, by whom, and which invoices will be paid. Knowing which customers pay on time and which will be late helps businesses keep moving without waiting around for customers due to uncertainty.
Using historical data, the new intelligent budget proposal tool creates an accurate budget proposal. This budget proposal saves a lot of the busy-work that goes along with budget proposals and creates a reasonable starting point based on historical data. Then, informed people within your organization can account for additional factors that would not have occurred and been accounted for using historical data. This limits the work to just the highest value aspect of budget proposals.
All Dynamics 365 new features outlined in this section are in general availability.
This Dynamics 365 Finance Wave Release includes significant improvements to financial forecasting. The cash flow forecasting feature incorporates costs that were forecasted in project management and accounting to be included in cash and bank management. This is useful because there are many predictable costs and revenues associated with projects that were not previously included in these forecasts. These forecasts can be based on expected revenue generated from project outlines. The forecasts will now be viewable in cash overview-current company and cash overview-all companies workspaces. When setting up the cash flow forecast, users can specify project types and cost transaction types. This new feature will help businesses account for predictable future cash flows on a project-by-project basis.
To help bridge the communication gap between the creators of budget plans and teammates or other parties, Microsoft have added a budget plan narrative capability using a rich text HTML editor to assist budget planners in explaining factors that were considered as part of their plan. This allows for descriptions or revenue summaries to be included into budget plans for simplified communication with stakeholders, bankers, accountants, etc.
The new adjustment wizard is important for error prevention or unwanted changes when adjusting parent leases. The adjustment wizard allows users to select a lease and preview the adjustment entry, as well as other information, when making updates to financial information. This will not apply to the adjust book function, as it applies only to parent leases and its associated books. This tool enables the user to preview changes to right-of-use assets, the adjustment journal entry, and lease liability before finalizing changes.
This feature works to prevent errors calculating the effect of adjustments to the lease and giving a preview before confirming changes. This improved transparency will reduce risk of unwanted changes.
The ability to lock fixed asset books in unposted journals has addressed the issue of depreciation transactions being incorrectly posted to them. This feature checks during the posting process that a fixed asset book ID in another unposted journal has not been selected. In the case that is has been selected, the posting process will be halted, and the book will be locked. Locked asset book ID’s within journals can be unlocked manually.
Instead of collecting bank information from vendors and entering it yourself, a new Dynamics 365 Finance feature allows vendors to submit their own bank information through the Vendor Collaboration Workspace. This saves time for your team and still allows you to review and approve the information. This improves security because information is being put directly into a secure platform. This feature also allows vendors to remove bank account and add new ones. Through a new inquiry, AP users can review all these changes. Primary payment method is updated manually.
Another error prevention feature is the ability to block submission of vendor invoices to a workflow in the number of lines on the invoice are fewer than quantity of products received. The AP clerk will be notified of the error via a message and they can rectify the issue before re-submitting to the workflow. This saves time in the long run and prevents inventory costing issues.
A final feature to be introduced related to banking is the ability to set the end date for a bank reconciliation statement to be the same as the start date for a subsequent bank statement. There was previously an issue in Dynamics 365 Finance where banks would set overlapping endpoints and starting points for adjacent periods (possibly at midnight) and it could not be accommodated.
This will also avoid transactions being incorrectly thrown out due time zone differences causing confusion over dates.
There is no shortage of legal and logistical considerations when conducting business internationally. Thankfully, Microsoft is aware of this and makes changes to their software as new legislation is passed to ensure your business remains compliant. By adding Egypt to their out-of-box supported countries, Dynamics 365 Finance now covers 43 out-of-box countries and regions and 48 languages.
There have been many Dynamics 365 Finance new features that help businesses invoice customers as part of this Wave release. Many of them are localized to specific countries, but first we will look at the features that will be of importance to all Dynamics 365 Finance users. These invoicing features are now in general availability.
For efficiency, sustainability, and tax digitalization, businesses and government organizations are embracing electronic invoicing. Manual and paper-based invoicing processes are highly error prone compared to electronic alternatives. Additionally, from a taxation standpoint, it is advantageous for governments to have real-time tax information to hedge risk against tax evasion and fraud.
The new electronic invoicing add-in has an out-of-box integration with all Dynamics 365 Finance and Operations applications. Significant strides have been made in terms of configuration of invoices, including localized configurations that will be expanded upon. Configuration is done through the Regulatory Configuration Service (RCS) and globalization feature setup. Included in these configurations is the opportunity to use several e-invoice formats including:
E-invoice submission to external web services is configurable and e-invoice messages can be processed in batch. Additionally, electronic signatures are supported.
Electronic invoicing for this release includes country-specific formats for configurable invoices. This helps businesses easily stay compliant with national electronic invoicing standards. Country-specific formats included in Dynamics 365 Finance are:
Businesses can now define Natura codes with values and descriptions. This allows for significantly easier handling of Natura codes in FatturaPA electronic invoice. In reverse-change scenarios, calculation of values is improved.
Further control over invoice dates before posting have been introduced as part of this release, assisting internal auditing, and preventing manual mistakes. This new feature permits invoices being entered when a specific reason is defined but also blocks unallowed invoices from being entered. Within a sales tax book section, the chronology control of posting dates can be configured.
This feature will be of value for meeting legal regulations around document number chronology. First, specific number sequences can be configured to be period-effective for available document references and linked to specific number sequences. As a result, proper number sequence groups will be automatically defined when related documents are created, depending on their date.
Further changes have been made to meet legal requirements around credit notes referencing original invoices. Country context is no longer a controlling factor for invoice crediting, allowing it to be used across all legal entities. Free text credit notes, customer credit notes, and project credit notes are all included as part of this update.
Through the RCS, users can explore Microsoft’s globalization features. It functions as a central store for these features and can share them across your organization. As previously mentioned, the RCS allows for the configuration of invoices to accommodate country-specific needs and format preferences. These can then be employed directly from the RCS instead of using the standard configuration designers in Dynamics 365 Finance.
Current location options in Dynamics 365 Finance for deploying an RCS environment are USA, India, France, and now the rest of Europe.
The new Wave release has introduced additional barcode type support that now includes Intelligent Mail Barcodes (IMB). In addition to barcode support, there is also a new preview feature supported for print management.
Many countries require companies to withhold tax and a new Dynamics 365 Finance feature has improved the calculation, posting, and settlement of tax withholdings. The enhanced features for global withholding taxation are for withholding tax in accounts receivable, item withholding tax group (WHT on line level) in accounts payable, withholding tax payment, withholding tax calculation for miscellaneous charges, threshold on invoice amount, withholding tax payment against vendor account of tax authority, and invoice amount to be paid in withholding currency.
Additionally, due to tax regulation changes, there was a need to add packing slip date to determine tax rate. Previously, only invoice date, document date, or delivery date could be chosen. This helps your business avoid incurring a taxation rate not consistent with the known rate at the time of shipment.
The Tax Calculation Service is a new add-in to Dynamics 365 Finance, Supply Chain Management, and Project Operations that integrates out-of-box and is currently in public preview. The service includes configurable tax matrices for VAT ID, tax codes, and rates. The configurations allow these to be determined automatically during transactions. Furthermore, through the RCS, the tax service can be configured. Formulas and conditions can also be configured in the tax calculation designer. Shared tax determination across multiple legal entities and shared tax calculation across multiple legal entities is supported.
A new taxation feature that is still in public preview is supporting multiple VAT ID’s. This feature allows for multiple VAT ID’s under a single legal entity and it’s counterparts, as part of the Tax Calculation Service. Beyond allowing multiple VAT ID’s for a single legal entity, multiple ID’s are also allowed for vendors. The feature can automatically determine the correct legal entity or counterparty on transactions.
The Tax Calculation Service also supports indirect tax determination, posting, and calculation for receiving and shipping transfer orders. VAT ID determination for these transfer orders is supported as well and indirect taxation settlement support is available for transfer order transactions.
Overall, the Tax Calculation Service is a highly-anticipated new service and many companies will benefit from it when it becomes generally available!
As part of this Wave release, public sector institutions have not been neglected. However, there is only one new feature specific to public sector in Dynamics 365 Finance. On accounts payable vendor invoices, users can now restrict accounting distributions. This is valuable because users now have the flexibility to change accounts used in transactions (typically purchase orders) that reference encumbrance documents. There is a new setup page that allows users to determine which financial account dimensions can be changed on vendor invoices created from purchase orders.
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