Microsoft recently released a new Cost Accounting Module for Dynamics 365 for Finance and Operations, Enterprise Edition. The Cost Accounting Module included in previous versions of Dynamics AX has been discarded. Not a single line of code from the previous modules is included in the new cost accounting module. In this blog we will review the features of the new version of the Cost Accounting Module.
The new module organizes cost around three principal areas namely:
- Cost Types
- Cost Centers
- Cost Objects
This new module organization makes cost management much easier for managers. Managers can easily identify cost drivers and see how changes in business activities affects their bottom line. Tough questions such as “how would a change in business process impact cost and profits?” can now be answered with very little effort.
The Cost Accounting Modules comes with workspaces out of the box. These workspaces provide a direct access to cost data in the system.
Dynamics 365 F&O > Cost Accounting
(Fig 1 – Cost accounting list page)
To start, the Cost Control Workspace provides a clear presentation of the cost accounting data in the work area that can be exported to Microsoft Excel for further analysis. The data is provided via predefined templates. Pivot tables, conditional formatting, and graphics all support data processing.
Dynamics 365 F&O > Cost Accounting > Workspaces > Cost Control
(Fig 2 – Cost Control Workspace)
The Cost Control Workspace also provides a central point where Managers can view and assess the performance of various cost objects. Managers can view an Actual versus Budgeted costs comparison, and view cost behavior to gain a better understanding of how resources are consumed. Through the workspace, managers can consume cost accounting data without being cost accountants.
There is also the Cost Accounting Ledger Administration Workspace that is the Central Management point for the Cost Accounting Ledger. It provides direct access to Cost Centers, Shared Cost Elements, Setup validation, etc.
Dynamics 365 F&O > Cost Accounting > Workspaces > Cost Accounting Ledger Administration
(Fig 3 – Cost Accounting Ledger Administration Workspace)
Various security roles are used to control access to the cost control workspace to ensure that users are able to access only cost accounting data related to specific cost objects they are responsible for. This security feature further enhances data integrity and reduces the risk of data corruption.
The new Cost Accounting Module makes it easier for users to collect non-financial data also known as statistical dimensions, which are key components in overheard cost allocation.
The fact that users can define allocation rules and input allocation formulae, gives users the ability to customize overheard cost allocation to clearly reflect the manner in which resources are consumed.
The Cost Accounting Module should be viewed as a unit on its own. Users must assign a Cost Accounting Ledger to the Cost Accounting module before this module can be used. This is usually a shared ledger from the general ledger module in Financial Accounting.
Dynamics 365 F&O > Cost Accounting > Ledger Setup > Cost Accounting Ledgers
(Fig 4 – Cost Accounting Ledger Setup Form)
The cost accounting module is equipped with data connectors. This makes it easier to import cost element members such as main accounts, cost centers such as departments, business units and cost objects such as products, services from financial accounting modules or excel files into the cost accounting module. This significantly reduces set up time and enhances data integrity.
Dynamics 365 F&O > Cost Accounting > Imported Data > Data Connector
(Fig 5 – Data Connector Form)
Dynamics 365 F&O > Cost Accounting > Dimensions > Cost Element Dimensions
(Fig 6 – Cost Element Dimensions Form)
The cost accounting module comes with a rich array of reports to meet a huge spectrum of reporting needs. Report types include Native Charts, Standard SSRS reports, Customized Reports, and BI reports.
This module also comes with a feature called Dimension Hierarchy out of the box. The Dimension Hierarchy enables users define:
- Reporting structures that fits their Organization’s reporting requirements
- Cost policies
- Security Setup
In an effort to make relevant data readily available to decision makers, Microsoft included an advanced feature called the Cost Controlling Mobile Workspace in the Cost Accounting module. The Cost Controlling Mobile Workspace provides an instant view of current performance of Cost Centers by comparing actual costs against budgeted costs. Users can drill down to the level of individual cost elements. This feature enables Managers to make quick but data driven decisions. For example, a manager can quickly verify if there is available budget before approving a purchase request.
The new Cost Accounting Module is equipped with many out of the box features intended to improve cost management by enhancing data visibility and integrity, understanding cost behavior, and providing comparison and analysis.
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