Overview of the Record financial transactions business process area within the Record to report end-to-end scenario

Applies to: Dynamics 365 Business Central, Dynamics 365 Commerce, Dynamics 365 Finance, Dynamics 365 Project Operations, Dynamics 365 Supply Chain Management

This article describes how organizations can use Dynamics 365 to help manage the processes for recording financial transactions.

Efficiently recording financial transactions is a cornerstone of organizational success, serving as the bedrock for informed decision-making, compliance, and financial stability. In the realm of Dynamics 365, this process gains an extra layer of precision and agility, transforming the way businesses handle their financial data. The significance of recording financial transactions lies in its ability to provide a real-time, accurate snapshot of an organization's fiscal health. Dynamics 365 Finance and Business Central enhance this importance by streamlining the entire transaction recording process, offering robust tools and features that contribute to better financial management.

Implementing Dynamics 365 Finance involves navigating a series of crucial business processes to ensure seamless financial transaction recording. The overall processes include defining policies, setting approval workflows, managing ledger postings, recording entries, correcting vouchers, handling accruals, managing deferrals, and processing allocations. These steps collectively ensure accurate, real-time financial data. In a Dynamics 365 implementation, start with clear policies and early approval workflows, progressively addressing ledger management, journal entries, and voucher corrections. Strategic integration of accruals, deferrals, and allocations at different project stages maximizes the system's potential, optimizing financial transaction recording.

When embarking on a Dynamics 365 Finance implementation, addressing the aforementioned processes strategically is paramount. Begin by defining clear policies and procedures, setting the stage for a robust financial transaction recording system. Early in the project, establish the approval process for journals to ensure a streamlined workflow. As the implementation progresses, focus on managing ledger postings, recording journal entries, and correcting vouchers. Accruals, deferrals, and allocations should be methodically integrated into the system to enhance the accuracy and completeness of financial data. By approaching these processes thoughtfully at different stages of the project, organizations can unlock the full potential of Dynamics 365 Finance in revolutionizing their financial transaction recording practices.

Stakeholders

Many people across the organization should contribute to the decision-making process and design of the Record financial transactions area. The following list provides examples of such stakeholders:

• Finance leadership includes CFOs, controllers, and Finance Directors. Finance leaders should provide strategic input, aligning financial transaction processes with overall business objectives. Their involvement ensures that the implemented processes align with the organization's financial reporting standards and compliance requirements.

• Internal auditors contribute to the design phase by offering insights into compliance standards, risk mitigation, and internal controls. Their role is vital in validating that the implemented processes adhere to regulatory standards, local and international, and internal control frameworks.

• Accountants and controllers from various departments contribute domain-specific knowledge, ensuring the designed processes meet departmental needs. Active involvement in testing guarantees that the implemented financial transaction recording processes align with specific departmental requirements. Controllers provide valuable input on financial policies, procedures, and overall financial strategy alignment. Their involvement ensures the accuracy of financial reporting and compliance with regulatory standards during the testing phase.

• Budget managers contribute to the design by providing insights into budgetary requirements and expectations. Their participation in testing ensures that the financial transaction recording aligns with budgetary constraints and reporting needs.

• Procurement stakeholders include buyers, purchase managers, and so on, offer insights into the financial aspects of procurement processes, influencing the design of recording transactions related to procurement activities. Their involvement ensures that financial transactions related to procurement are accurately recorded and integrated into the overall system.

• Human resources (HR) stakeholders provide input on financial processes related to payroll and employee-related expenses. Involvement in testing ensures accurate recording of financial transactions associated with employee-related expenses.

By involving these specific stakeholders throughout the design and testing phases of the Dynamics 365 Finance implementation, organizations can ensure that the system is tailored to meet the diverse needs of different departments and functions, ultimately enhancing the accuracy and effectiveness of financial transaction recording processes.

Record financial transactions process flow

The following diagram illustrates the Record financial transactions business process area. Each solid gray rectangle on the diagram represents an end-to-end business process. The solid blue rectangle represents the business process area. The diagram shows the subprocesses for the business process area. The arrows on the diagram show the flow of the business process in an organization. If a subprocess can lead to more than one other subprocess, the parallel subprocesses are shown as branches.

1. Define policies and procedures for financial transaction recording

2. Manage ledger postings

3. Determine approval process for journals

   1. Record journal entries

   2. Correct ledger vouchers

4. Manage accruals

   1. Record journal entries

   2. Correct ledger vouchers

5. Manage deferrals

   1. Record journal entries

   2. Correct ledger vouchers

6. Process allocations

   1. Record journal entries

   2. Correct ledger vouchers

Record financial transactions benefits

There are many benefits that can be used to monitor and measure the success of implementing technology to support the Record financial transactions area. The following sections outline the key benefits that an organization might monitor and measure for Record financial transactions.

Enhanced accuracy and efficiency in financial recording

One of the primary benefits of using Dynamics 365 Finance for recording financial transactions is the significant enhancement in accuracy and efficiency. The system's robust features, such as automated journal entries and ledger postings, contribute to reducing manual errors associated with traditional recording methods. This not only ensures data precision but also accelerates the overall transaction processing speed.

Key Performance Indicators (KPIs) to measure this benefit include a reduction in manual data entry errors by a certain percentage and an increase in the speed of financial transaction processing, as reflected in reduced cycle times.

Streamlined approval workflows for expedited decision-making

Dynamics 365 Finance empowers organizations with streamlined approval workflows, a key benefit that expedites decision-making processes. The system allows for the efficient determination of approval processes for journals, ensuring that financial transactions follow a well-defined path for validation. This not only enhances control and compliance but also accelerates the pace at which financial decisions can be made.

KPIs for this benefit include measuring the average time taken for journal approval and tracking the percentage reduction in approval-related delays, leading to faster financial decision cycles.

Comprehensive financial visibility and reporting

Dynamics 365 Finance provides organizations with a comprehensive view of their financial landscape, enabling better decision-making through enhanced visibility and reporting capabilities. The system's features facilitate accurate accruals, deferrals, allocations, tax reconciliation and consolidation processes, ensuring that financial data is not only recorded but also presented in a way that supports strategic insights.

KPIs for this benefit include improvements in the accuracy of financial reporting, measured by a reduction in reporting discrepancies, and an increase in the speed of generating financial reports, enhancing the organization's ability to respond swiftly to changing financial dynamics.

Next steps

If you would like to implement Dynamics 365 solutions to assist with your Record financial transactions business processes, you can use the following resources and steps to learn more.

1. Define ledger structure and organizational accounting policies

2. Comply with tax, audit, and regulatory requirements

3. Manage budgets

4. Manage fund accounting

5. Record financial transactions (you are currently on this step).

6. Close financial periods

7. Report and analyze financials and cash flow

Related information

You can use the following resources to learn more about the Record financial transactions process in Dynamics 365.

• General journal processing - Finance

• Ledger allocation rules - Finance

Contributors

This article is maintained by Microsoft. It was originally written by the following contributors.

Principal author:

• [Rachel Profitt](https://www.linkedin.com/in/rachelprofitt/) | Principal Program Manager