Improving the measurement of your company’s prosperity

Measuring a company’s prosperity is based on financial data. This measurement often struggles with a lack of quality data, usually caused by insufficient flexibility of the information system when capturing and reporting financial data. Microsoft Dynamics AX 2012 is a major step forward in this respect.

In data capture, AX 2012 brings these novelties compared to previous versions:

Unlimited number of financial dimensions

The base financial dimension of an accounting transaction is the general ledger account. Information systems also typically work with financial dimensions such as Cost Center, Department, or Project. In AX 2012 you can now record an unlimited number of financial dimensions on a transaction. This lets you break down posting information into greater detail. Did the revenue originate on the web or in a physical store? In which store and at which POS was the revenue posted? Which salesperson arranged the revenue? Product, Product group, Vendor, Asset card… these are just examples of commonly used financial dimensions; AX 2012 offers more than 30 out of the box. You can also create your own user-defined financial dimensions with custom values.

Rules for filling financial dimensions

An unlimited number of financial dimensions can complicate data entry—the more dimensions a user must fill, the more time it takes.

The new platform for financial dimensions and organizational hierarchies lets you track your company’s financial health down to the atomic level while viewing financial data from any angle.

Therefore, AX 2012 auto-fills financial dimensions wherever possible—for example, sales channel, store, and employee are taken from the sales order. In addition, there is a tool to control rules for filling dimension values. You can set different dimensions for revenue accounts, others for cost accounts, and disable dimensions entirely for some accounts.

Organizational hierarchies (groups of financial dimensions)

On top of financial dimensions, AX 2012 enables creation of organizational hierarchies, i.e., tree structures of financial dimensions and their groups. A typical example from our retail practice is the multiple views of stores used by our customer BCC Elektro—a consumer electronics retailer in the Netherlands (more on the AX 2012 R3 implementation at BCC Elektro).

• stores by size (Small, Medium, Large)
• stores by location (North, South, West, East)
• stores by sales channel (brick-and-mortar, web, call center…)

The number of user-defined organizational hierarchies is not limited. In reporting you can display financial data for any node in any hierarchy and view financial results from any perspective.

In summary, when capturing financial data you can benefit from the new platform of financial dimensions and organizational hierarchies, which lets you:

• track your company’s financial condition down to the atomic level, i.e., maximum detail
• view financial data from any angle

How can these innovations be used in financial reporting? Here are two more novelties in AX 2012:

Management Reporter

The Management Reporter tool, with online access to the AX 2012 database, lets you report 100% up-to-date data. You can work with data from a single company or across all companies you manage in AX 2012. Reports are user-definable and can be scheduled to arrive by email every morning at a set time.

Management Reporter works with financial dimensions and organizational hierarchies mentioned above. You can switch data granularity directly in the report: by a specific store, all large stores (size hierarchy), stores in the north (location hierarchy), or the entire company. Drill-down to the level of individual accounting transactions is standard.

Dashboards

Imagine a traffic light on a large LCD in your office signaling the prosperity and financial health of your company. Similar to modern IT support dashboards signaling your IT infrastructure status. Green for “OK”, Orange for “Caution”, and Red for “Danger”. You see this set of indicators on the AX 2012 home page, so access is very quick. A glance at the colors shows the situation instantly. If red is lit, click the indicator to explore details and exact numbers.

This is how Dashboards work. Technologically they are built on analytical reports you may know from earlier AX versions.

Analytical reports are designed for deeper analysis of business data and trend discovery—AX 2012 provides 15 OLAP cubes for this purpose. Besides data for analysis, the cubes contain calculated financial metrics, surfaced in AX 2012 via Dashboards.

Use Dashboards—“traffic lights”—for rapid visual checks of your company’s financial health.

In short, the key AX 2012 reporting innovations are:

• Management Reporter with the ability to display financial data at any level of detail—from specific financial dimensions and user-defined dimension groups to the whole company
• Dashboards for instant insight into your company’s current status

Finally, here is how AX 2012 improves measuring your company’s prosperity:

• in data capture
  • it enables deeper detail using financial dimensions and their groups
• in reporting
  • it leverages stored dimension detail in Management Reporter and other tools
  • it enables quick visual checks of financial health via Dashboards

Interested in improving how you measure your company’s prosperity? Learn more about our Dynamics AX solutions for retail, wholesale, and logistics on our website.

Filip Rozsíval works as a Senior AX Consultant at Blue Dynamic.