CHAPTER 8: GENERAL LEDGER

Chapter 8: General Ledger CHAPTER 8: GENERAL LEDGER Objectives The objectives are: Describe the extended length for address fields. Create Account Schedules using new fields and filters. Distribute expenses from a parent company to multiple subsidiaries through a purchase order. Demonstrate improvements to the Financial Void functionality for checks. Introduction Microsoft Dynamics NAV 5.0 offers some improvements to help financial transactions and analysis. The improvements in General Ledger include expanded address fields, new functionality for Account Schedules, the ability to assign Intercompany expenses across companies, and new options when processing Financial voids. This section describes each of the improvements and demonstrates how the improvements can be used. Page 147

What's New in Microsoft Dynamics NAV 5.0 Application, Part I Address Fields In Microsoft Dynamics NAV 5.0, Address and Address 2 fields are increased to 50 characters. This accommodates the longer address lengths required by many countries/regions. The fields are updated on: Customer cards Vendor cards Bank account cards Company information Account Schedule Improvements Account Schedules in Microsoft Dynamics NAV 5.0 contain new functions to help analysis and reporting. These functions are: Additional fields in Account Schedule rows New operator, %, that can be used in formulas Additional Totaling Type, Set Base for Percent Filter fields for Global Dimensions and Business Units Additions to Account Schedule Rows In Microsoft Dynamics NAV 5.0, Account Schedule rows include new fields that let the user select the type of amounts to appear on the row. These new fields are as follows: Row Type Amount Type Page 148

Chapter 8: General Ledger FIGURE 8-1: ACCOUNT SCHEDULE FORM The options in the Row Type field are as follows: Row Type Net Change Beginning Balance Balance at Date Definition The program calculates the total using the total changes from the start to the end of the specified date range. The program calculates the total using the total of all entries from the initial transaction in the program to the last entry before the start of the specified date range. The program calculates the total using the total of all entries from the initial transaction in the program through the date at the end of the specified date range. The options in the Amount Type field are as follows: Amount Type Net Amount Debit Amount Credit Amount Definition The amount calculated by the program includes debit and credit entries. The amount calculated by the program includes only debit entries. The amount calculated by the program includes only credit entries. By using the Row Type and Amount Type fields together, users can determine the timing and the type of entries that are used to calculate the amounts displayed. Page 149

What's New in Microsoft Dynamics NAV 5.0 Application, Part I The Percent (%) Operator The % operator is a new operator available for use in formulas. Use this operator to display a percentage between two rows or two columns. Enter the % operator in formulas as follows: Use between two terms in a formula to divide the first term by the second term and multiply the result by 100. Use at the end of a formula to use the most recent Set Base For Percent result as the denominator. For more information, see the topic "Set Base For Percent" in this section. For example, an Account Schedule has a column YTD that contains the year to date expenses, and a column PRYR that contains the prior year to date expenses. Enter a third column to display the percent difference of these two columns, by using the formula: (YTD-PRYR)%PRYR. Set Base For Percent In the Totaling Type field, a new option, Set Base For Percent, is available. The Set Base For Percent option lets users set a basis (denominator) for calculating a percentage. The base is chosen from other rows in the Account Schedule. The program uses the information in the Column Layout to determine where to display the percentage calculation in the Account Schedule Overview form. This can be used, for example, to display a column that shows the percentage of each expense account as it relates to the total revenue amount. Using Set Base For Percent in Account Schedules To set up an account schedule that displays a column showing percentages, first insert a row using the Totaling Type of Set Base For Percent. Then, add a column to show the percentage calculation in the Account Schedule Overview form or when printing the report. Follow these steps: 1. On the Navigation Pane, click FINANCIAL MANAGEMENT GENERAL LEDGER ANALYSIS & REPORTING ACCOUNT SCHEDULES. 2. In the Name field, click the AssistButton to open the Account Schedule Names form. 3. Enter a Name and Description to create a new Account Schedule. 4. Click OK to set up the Account Schedule rows. 5. Click FUNCTIONS INSERT ACCOUNTS to select the Account Schedule rows. 6. To use the Set Base For Percent function, insert a row before the rows that require a percentage to be calculated. Page 150

Chapter 8: General Ledger 7. In the Description field, enter a description for the line. 8. In the Totaling Type field, select Set Base For Percent. 9. In the Totaling field, enter the Row No. for the row that contains the amount to be used as the denominator (base) for the percentage calculations. Refer to the first line of Figure 1-2 for an example. FIGURE 8-2: ACCOUNT SCHEDULE FORM NOTE: To enter multiple rows with the Totaling Type of Set Base For Percent in one Account Schedule, place each Set Base For Percent row immediately before the rows to which it applies. The program searches for the nearest previous row with the Totaling Type of Set Base For Percent to calculate the percentage for each row in the Account Schedule. 10. Click FUNCTIONS SET UP COLUMN LAYOUTS. 11. In the Name field, click the AssistButton to open the Column Layout Names list. 12 Select a column layout or enter a Name and Description to create a new column layout. Click OK. 13. Insert one or more columns to use as the numerator in the percent calculation. Make sure that you give these columns a Column No. 14. Insert a column to display the percentage calculation. 15. In the Column Header field, enter a name for the column. 16. In the Column Type field, select Formula. Page 151

What's New in Microsoft Dynamics NAV 5.0 Application, Part I 17. In the Formula field, type the Column No. for the column to be used as the numerator in the percentage calculation, and then the % sign. For example, if the Column No. for the numerator is YTD, then type YTD% in the Formula field. Refer to the fourth entry in Figure 8-3 for an example. FIGURE 8-3: COLUMN LAYOUT WINDOW 18. Close the Column Layout form. 19. From the Account Schedule form, click ACC. SCHED. OVERVIEW to preview the Account Schedule as shown in Figure 8-4. Page 152

Chapter 8: General Ledger FIGURE 8-4: ACC. SCHEDULE OVERVIEW WINDOW 20. Close all forms. Account Schedule Columns Column Layouts have been extended with filter fields for Global Dimensions and for Business Units (for Consolidated Companies). This enables users to create Column Layouts that show Global Dimension information across columns. Columns in account schedules include the new fields: Business Unit totaling Global Dimension 1 totaling Global Dimension 2 totaling Dimension 3 totaling Dimension 4 totaling Page 153

What's New in Microsoft Dynamics NAV 5.0 Application, Part I FIGURE 8-5: COLUMN LAYOUT WINDOW When the column layout is not linked to an Analysis view, the global dimensions are available in the form. When the column layout is linked to an Analysis view, the dimensions specified in the Analysis view are displayed in the form. Analysis views are linked to column layouts by clicking in the Name field on the Column Layout window, and then in the Analysis View Name field, clicking the arrow to select the view. Dimensions are assigned to Analysis views from the Navigation Pane by clicking FINANCIAL MANAGEMENT SETUP DIMENSIONS ANALYSIS VIEWS DIMENSIONS TAB. NOTE: There is potential for interaction between the filters set in the columns and the filters set in the rows. When an amount is to be printed in a particular cell in the account schedule, it must pass through both the row and the column filters. Page 154

Chapter 8: General Ledger Lab 8.1 Using Account Schedules to Analyze Sales Scenario: As the sales manager of Cronus, you are responsible for providing a report demonstrating the percentage of total retail sales made up by domestic, EU, and export sales during the twelve months of 2008. Challenge Yourself! Create an Account Schedule with rows for the domestic, EU, export, and total sales accounts in the General Ledger. Create a column to display each type of sale as a percentage of total sales. Need a Little Help? 1. Create a new Account Schedule and insert G/L Account Nos. 6110, 6120, 6130, and 6195 into the rows. 2. Renumber the rows. 3. Insert a line at the top of the Account Schedule rows. In the Totaling Type field, select Set Base For Percent. In the Totaling field, enter the row number for the row that contains Total Sales of Retail account. 4. Create a new column layout with a column to display the sales balance for each of the rows and a column to display the percentage of total sales for each of the rows. 5. In the column for the percentage of total sales, in the Column Type field, select Formula. In the Formula field, type the column number for the sales balance column followed by a % sign. 6. In the Account Overview window, in the Date Filter, enter 01/01/08..12/31/08. Page 155

What's New in Microsoft Dynamics NAV 5.0 Application, Part I Intercompany Purchase Invoice Cost Distribution When a group of related companies relies on a parent company to manage the purchasing from external vendors, the parent company must allocate the purchase costs to the correct partners or subsidiary companies. The intercompany posting functions in Microsoft Dynamics NAV 5.0 can be used to manage this cost distribution. Intercompany Purchase Invoice Cost Distribution Fields Three new fields in the purchase order lines help the distribution of purchase costs. These fields let users select the appropriate intercompany partner, to indicate the type of account used by the partner for the intercompany transaction, and to select an account from the intercompany partners account listing. The new fields are as follows: IC Partner Code IC Partner Ref. Type IC Partner Reference FIGURE 8-6: PURCHASE ORDER WINDOW Page 156

Chapter 8: General Ledger Distribute Purchase Invoice Costs to Partner Companies To charge purchase invoice costs to partner companies, follow these steps: 1. Create the purchase order or purchase invoice as usual. 2. Enter the header information. 3. Enter the purchase order lines for the items to be purchased. NOTE: Purchases can be charged to partner companies only when the purchase order is to an external vendor. 4. In the Type field, select G/L Account. 5. In the No. field, enter the number of the G/L Account in the parent company to be debited by the purchase transaction. This account is also credited when the transaction is posted. 6. In the IC Partner Code field, select the intercompany partner to whom the charges apply. 7. The IC Partner Ref. Type field defaults to G/L Account. Do not change the default setting. 8. In the IC Partner Reference field, enter the number of the IC G/L Account (the partner or subsidiary s account) to be debited by the intercompany transaction. 9. In the Quantity field, enter the number of units to be charged to the partner company. 10. In the Direct Unit Cost Excl. VAT or the Direct Unit Cost Incl. VAT field, enter the cost per item that is to be charged to the partner company. 11. Post the purchase order or purchase invoice as usual. Page 157

What's New in Microsoft Dynamics NAV 5.0 Application, Part I Depending on the type of expense entered, the method of entering the Purchase invoice differs. For example, when the Parent company receives vendor invoices for advertising, the amount is allocated among the subsidiaries based on the original contract. To charge the costs to the subsidiaries: In the Quantity field, enter 1. In the Direct Unit Cost field, enter the total contracted cost for the advertising for the partner. Alternatively, when purchasing boxes of copy paper: In the Quantity field, enter a value that represents the number of boxes of copy paper purchased. In the Direct Unit Cost field, enter the per unit cost to be charged to the partner company. Page 158

Chapter 8: General Ledger Lab 8.2 Distribute Purchase Invoice Costs to Partner Companies Scenario: The purchaser for Cronus has been charged with managing orders for all the company s partners. He or she has to put an order with vendor 10000 for postage and envelopes, and charge the correct partner. The vendor invoice number is NAV08. Intercompany Partner Code IC Partner Reference Description Quantity Per Unit Cost ICP 20 8240 Postage 6 39.00 ICP 20 8210 Envelopes 12 5.00 ICP 20 8240 Postage 12 39.00 ICP 30 8210 Envelopes 10 5.00 TABLE 1 Challenge Yourself! Create a purchase order for Vendor 10000. Enter lines for the expense and Intercompany distribution of charges. Post the transaction. Need a Little Help? 1. Create a purchase order for Vendor 10000 for all the items. 2. Create a purchase order line with a Type of G/L Account for each combination of IC Partner Code and Account No. 3. For each line, select the correct G/L Account number based on the information provided in Table 1. 4. For each of the IC Partner Reference numbers, use the table provided in Table 1 to select the account. 5. Use the Direct Unit Cost Excl. VAT field for each line to determine the Direct Unit Cost Excl. VAT amount for the intercompany partner lines. 6. Post the transaction. NOTE: To complete the intercompany transaction process, there are additional steps required. For more information about Intercompany transaction processing, refer to the Finance content. Page 159

What's New in Microsoft Dynamics NAV 5.0 Application, Part I Improvements to Financial Voids Previously, when voiding checks, the system reversed the transaction(s) initially posted using the date of the original transaction. Microsoft Dynamics NAV 5.0 provides functionality that enables users to: Unapply and void the check and transactions as in the past. Void the check only. Enter a date to use for the void. This improvement does not affect the process of voiding checks during the payment cycle when they have been printed but not yet posted. Demonstration To demonstrate the financial void functionality, a document is created and processed through the payables cycle. This includes creating and posting a purchase invoice, creating and posting a Payment journal, processing a financial void, and reviewing the resulting vendor ledger entries. Make sure that you are careful with the dates used for the invoice, journal, and void check. Steps First, create and post an invoice for a vendor. To do this, follow these steps: 1. On the Navigation Pane, click FINANCIAL MANAGEMENT PAYABLES INVOICES. 2. Enter an invoice for vendor 61000. The vendor is set up with Manual for their payment applications. 3. In the Posting date field, use a date of January 10, 2008. 4. In the Vendor Invoice No. field, enter DEMO. 5. In the Type field on the lines, select G/L Account. 6. In the No. field, enter 6710. 7. In the Quantity field, enter 1. 8. In the Direct Unit Cost field, enter 1,000.00. 9. Post the invoice. 10. Close the form. Next, create and post a payment journal for the invoice. To do this, follow these steps: Page 160

Chapter 8: General Ledger 1. On the Navigation Pane, click FINANCIAL MANAGEMENT PAYABLES PAYMENT JOURNAL. 2. Select the Bank batch name. 3. In the Posting date field, use January 15, 2008. 4. In the Document number field, enter PAY. 5. In the Account type field, select Vendor. 6. In the Account number field, enter 61000. 7. In the Applies-to Doc. No. field, click the AssistButton to select the DEMO invoice. 8. In the Bank Payment Type field, click the AssistButton to select Computer Check. 9. Click PAYMENTS PRINT CHECK to print the check. 10. In the Bank account field on the Options tab, click the AssistButton to select the WWB-Operating bank account. Click Print. Note the system-assigned check number. 11. Post the journal by clicking POSTING POST and then clicking YES in the dialog box. 12. Close the form. Now, financially void the check. To do this, follow these steps: 1. On the Navigation Pane, click FINANCIAL MANAGEMENT CASH MANAGEMENT BANK ACCOUNTS. 2. Locate the WWB-Operating bank account card. 3. Click BANK ACCOUNT CHECK LEDGER ENTRIES. 4. Locate the check number posted in the demonstration for vendor 61000. 5. Click CHECK VOID CHECK to open the Confirm Financial Void form. Page 161

What's New in Microsoft Dynamics NAV 5.0 Application, Part I FIGURE 8-7: CONFIRM FINANCIAL VOID WINDOW 6. In the Void Date field, be aware that the date the check was posted displays in the field. 7. In the Void Date field, use January 25, 2008 for the date to void the check. 8. Select Unapply and void check. 9. Click OK. 10. Close all forms. Finally, review the vendor ledger entries. 1. On the Navigation Pane, click FINANCIAL MANAGEMENT PAYABLES VENDORS. 2. Locate vendor 61000. 3. Press CTRL+F5 to review the vendor ledger entries. 4. Close all forms. Page 162

Chapter 8: General Ledger Lab 8.3 Financially Void a Check Scenario: The controller of Cronus International Ltd. approved payment for invoice 108023 to London Postmaster, vendor 10000, and a check was issued on January 18, 2008. The vendor calls to inquire why a payment on the invoice has not been received. The controller has to financially void the previous payment as of January 24 th so that a new check can be issued. The controller decides to Void check only when processing the void. Challenge Yourself! Post a payment journal for invoice 108023 to vendor 10000 using a date of January 18, 2008. Financially void the check, using the Void check only option and a date of January 25, 2008. Need a Little Help? 1. Create a Payment journal using the Bank batch. 2. Select vendor 10000 in the Account number field before you use the AssistButton in the Applies-to Doc. No. field to select the invoice. 3. Print the check and post the journal. 4. Locate the check in the Check Ledger Entries. Page 163

What's New in Microsoft Dynamics NAV 5.0 Application, Part I Conclusion This section described and demonstrated the changes to functional areas within General Ledger in Microsoft Dynamics NAV 5.0. These changes can benefit companies by extending address fields to satisfy worldwide requirements, improving financial reporting capabilities, enabling intercompany payables processing, and enhancing bank management through improved financial voids. Page 164

Chapter 8: General Ledger Test Your Knowledge General Ledger 1. How many characters can be entered in an address field in Microsoft Dynamics NAV 5.0? 2. To charge purchase invoice costs from a parent company to subsidiary companies, enter the Code in the purchase invoice lines. 3. In an Account Schedule, if you want the amount on the line to include the total changes from the start to the end of the date range, you select as the Row Type. a. Net Change b. Beginning Balance c. Balance at Date 4. In the Formula field of the Account Schedule Column Layout form, what formula do you enter to view Column A as a percent of Column B? 5. What Totaling Type lets you view domestic sales as a percentage of all sales in an Account Schedule? Page 165

What's New in Microsoft Dynamics NAV 5.0 Application, Part I Quick Interaction: Lessons Learned Take a moment and write down three key points you have learned from this section: 1. 2. 3. Page 166