Financial dimensions hierarchies – Taking advantage of Organization Hierarchies in Microsoft Dynamics AX 2012-Continued..

Hi Friends,

In one of my earlier posts, I explained in detail about how to create and setup organization hierarchies in Microsoft dynamics AX 2012 and I also highlighted all the benefits which can be derived by using the organization hierarchies at different places in Microsoft dynamics AX 2012.

In today’s post I will explain one of the advantage/benefit which we can derive by using the organization hierarchy in the General ledger module.

In AX 2009 and earlier versions we used to have the dimension set hierarchies to ensure controlling of financial transactions entries in the system. In many situations, it is needed that only a se of financial dimensions are allowed to be keyed in, in a transaction. For example, when Department A is chosen in a financial transaction,  only cost center C1 and C2 can be chosen, but no other cost centers.

This can be achieved by using the organization hierarchies in Microsoft dynamics AX 2012.

Microsoft Dynamics AX 2012

To demonstrate the use of this functionality in AX 2012, I would use the below example.

When Department Administration is entered, then the cost centers Administration(UK) and Administration(USA) should be only allowed and when department Marketing is chosen, then cost center Marketing research(UK) and Marketing research(USA) should be allowed for entry in the financial transactions.

1. The first step involved in this to create the required internal organization hierarchy to represent the overall dimensions hierarchy.

2. Navigate to Organization administration > Common > Organizations > Organization hierarchies for and follow the steps in my earlier post to create and publish the organization structure. Below diagram shows how the organization structure will look like after this is setup.

image

3. Once the organization structure is created and published, the next step is use this is the account structures under GL module.

4. Navigate to GL > Setup > Chart of accounts > Configure Account structures, and then select the account structure for which you want to set up the hierarchies.

5. Select the Account structure and click Edit button.

6. Click Relationships button.

7. The Select relationships form shows all the organization hierarchies. Notice that the organization hierarchy which we created above is shown and also system shows all possible combinations of hierarchy values based on the setup done in the hierarchy.

image

8. Now that we want to control the entry of the cost centers based on selection made for the department dimension, select the record which shows Party A = Department and Party B = Cost center and click Ok button. Note that you can also select multiple relationships here based on your hierarchy needs.

9. Once the relationship setup is done, Activate the account structure by clicking Activate button.

10. Let us now create and general journal and see the impact of this relationship setup at the account structure level. Navigate to GL > Journals > General journal.

11. Create a new journal and click Lines button.

12. Below diagram shows the account structure we will key in in this financial transaction.

image

13. Select a ledger account(Say 401120) and select Department = Administration.

image

14. The next segment in the account structure is the Cost center. As soon as you open the drop down for this, notice that system only shows the two cost centers which we have set up in the organization hierarchy. Now, user who is entering the financial transaction, cannot enter erroneous data, as he/she will see only the dimensions which the business wants to be entered. See screen below.

image

15. Similarly, notice the the cost centers when we enter Marketing as the Department.

image

Simple and easy.

In few of my upcoming posts I will highlight the areas where the organization hierarchies can be leveraged and used. If you have any queries regarding this, please reach out to me.

Till next time !!

Sandeep

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8 thoughts on “Financial dimensions hierarchies – Taking advantage of Organization Hierarchies in Microsoft Dynamics AX 2012-Continued..

  1. Hi Sandeep
    I have 2 legal entities with the exact account structure, but use different dimension values. What are the best way to set this up, so that users from each of the company can only see their company specific dimension value? We are on R2.

    Thanks!
    Shyam

  2. Hi Sandeep,

    I would like to ask you that (Region, Country, City, Branch, AssetId and WorkshopSection),

    Among these dimensions, i need to set mandatory for my financial dimension (only for Region, Country, City, Branch and Asset). How to set mandatory for this?

    Could you please help me in this regard?

    Thanks in advance.
    Mohamed Hussain. A

    • Hi,

      You will need to configure these as dimension segments for the range of main accounts for which you want them to be mandatory. Do no Allow blanks for these dimensions.

      Let me know if you need more steps.

      Regards
      Sandeep

  3. Good one sandeep. Gives clear picture on controling the dimensions. But i have a small doubt, without defining the organization hierarchy, cant we control the dimensions entry by the user.

      • Dear Sandeep,
        How to control dimension entry without defining organization hierarchy. In your comment it is said using account structures also.? Does that mean using Advanced Rules Structure. ?? If yes,
        Can you help me to configure advanced rule structure considering the same financial dimensions given in the above scenario.

        However, i will give the scenario once again:
        There are 4 dimension in total. i.e. (a) Division (b) Region (c) Branch (d) Sales executive

        For (a) Division dimension — dimension values are :– (i) Hardware (ii) Mechanical (iii) Retail

        For (b) Region dimension — dimension values are :- (i) Central (ii) Eastern (iii) Western

        For (c) Branch dimension — dimension values are :- (i) Branch A, (ii) Branch B,, (iii) Branch C, (iv) Branch D

        For (d) Sales executive dimension — dimension values are :- (i) Executive A, (ii) Executive B…… etc

        Requirement is:

        In journal entries:– when Division dimension – Hardware or Mechanical is selected then for Region dimension all values should come. But Branch dimension values should not allow to select. And Sales executive values should be selected.

        Where as, when Division dimension — Retail is selected then Region dimension all values should come and Branch dimension all values should come. But sales executive dimension values should not allow to select or should not display in drop down.

        Please help with configuration steps.

        Regads

        Srinivas

        • Srinivas,

          The organization hierarchy is just another way of defining the dimension hierarchy. You can also set this up right inside the account structures where you can define dimension value ranges for a range of accounts. You would do this defining multiple nodes under the segments.

          Let me know if you are not able to do this and need more help ?

          Sandeep..

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