At high level a new D365 company needs to tie certain information together in for the company to process any information. Without this setup, you cannot process transactions in your new company.
The General Ledger setup holds this base information. The setup takes various information and applies it to your Legal Entity
Today we will explore the related settings.
Will will use example screen shots from Microsoft's Contoso USA Manufacturing (USMF) Legal Entity.
Menu Path
You access the configuration via:
General ledger > Setup ledger > Ledger
A. Chart of Accounts
In our example, a Chart of Accounts named "Shared" has been assigned.
You may have a single Chart of Account, or several.
The Chart of Accounts may been named several ways.
i.e.
COA
Shared
USA_COA
CAN_COA
Global_COA
Choose the desired Chart of Accounts from the drop down list.
Related path
General ledger > Chart of accounts > Accounts > Chart of accounts
B. Fiscal Calendar
In our example a Fiscal Calendar named "Fiscal" had been assigned.
Calendars control the periods and dates available within a year for accounting journals.
Your company may operate on a standard Gregorian calendar for all of your companies, or you may have different year beginning and ending dates for your various companies.
If you have several different calendars, this is ok. Not to worry, D365 will understand the different calendars.
Choose the desired Fiscal Calendar from the drop down list.
Related path
General ledger > Calendars > Fiscal calendars
C. Account Structures
You can add as many Account Structures as desired to your Legal Enity.
Account Structures define rules for journals.
Account Structures define, for specified Main Accounts
which Financial Dimensions are available for Journals
restrictions defining allowed Financial Dimension Values for Journals.
Like the example, I often see at least two Account Structures
i.e.
Balance Sheet related Account Structure
Profit Loss related Account Structure
If you have more than one Account Structure assigned to Ledger Setup, it is important to note that the Main Accounts included in your chosen structures can only exist in one of your chosen Account Structures.
Alternatively, you can list all of your Main Accounts in a single Account Structure.
If this is the case, I usually name the Account Structure" "Default" or "AS"
Related path
General ledger > Chart of accounts > Structures > Configure account structures
D. Accounting Currency
This can be any currency. Almost all the global currencies exist in D365.
Usually your assign the statutory currency applicable to the country your Legal Entity is created in.
Here is a link to ISO 4217 statutory currencies by country.
Related path
General ledger > Currencies > Currencies
E: Reporting Currency
Like Accounting Currency, this can be any currency.
Usually you choose the same Accounting and Reporting currency.
There may be cases where you want a the Accounting Currency and Reporting currency to be different.
Say you have a GBR Legal Entity that is owned by a USA Legal Entity and want the Trial Balance to display both Great Britain Pounds (GBP) and United States Dollars (USD).
This is easy to setup.
In you GBR legal entity, setup your ledger as follows:
Accounting Currency = GBP
Reporting Currency = USD
Now when you run a Trial Balance report, the two different currencies will be displayed.
Related path
General ledger > Currencies > Currencies
F: Accounting Currency Exchange Rate Typs
This is the Exchange Rate Type that stores Currency Rates that are used for Journals.
I usually name this type "Default"
Related path
General ledger > Currencies > Exchange rate types
G: Budget Currency Exchange Rate Types
This is the Exchange Rate Type that stores Currency Rates that are used for Budget Register Entries.
I usually name this type "Budget"
Related path
General ledger > Currencies > Exchange rate types
H: Accounts for Currency Revaluation
This accounts are used when Foreign Currency Revaluation is performed.
Revaluation is applicable when you transact in a currency other than the Accounting Currency (F. above)
Example:
Accounting Currency: GBP
Transactions Currency: any other currency that is not GBP (ie EUR)
Revaluation will update the value of the Transaction so that the Accounting Currecy displays a new value based on Currency Rates that change perpetually.
i.e.
Unpaid AP invoice in a foreign currency will create an Unrealized Gain/Loss.
Paid AP invoice in a foreign currency will create a Realized Gain/Loss.
For transactional companies (see Related path), the Main Accounts chosen for both Realized and Unrealized Gain/Loss are usually classified as Profit and Loss accounts.
Related path
Organization administration > Organizations > Legal entities > General (tab) > Use for financial consolidation process (No)
I: Accounts for Currency Revaluation
For Consolidation companies (see Related path), the Main Accounts chosen for Unrealized Gain/Loss are usually classified as Equity accounts.
Related path
Organization administration > Organizations > Legal entities > General (tab) > Use for financial consolidation process (Yes)
Today we have successfully performed Setup Ledger.