This in-depth demo on dimensions explains how to create a dimension and the data entry rules, and report with dimensions in Microsoft Dynamics 365 Business Central.
The following is a partial transcription of the video above:
“Dimensions are different ways of categorizing financial transactions primarily for reporting and analysis purposes. They are like data tags that you associate with a journal entry or an invoice, mainly with journal entries for analyzing profit and loss or income statement.
The most common one that everybody uses is a ‘Department’ – this is your research and development, sales and marketing and general administrative. You would tag all your operating expenses, spending, salaries, vendor costs, depreciation with a department.
In some of the older systems like Dynamics GP for example, the chart of accounts would include both your natural account- a natural account is how you would categorize your high-level lines on a balance sheet or an income statement – so cash, prepaids, accounts payable, salary, interest expense, your traditional spending categories. And in some systems the dimension would be a part of that string so you would have salaries for finance, research, marketing, might even have a business unit or a product code, etc.. In Dynamics 365 Business Central and most systems, it’s a separate field. You will have your natural chart of accounts as a column field and all your dimensions as separate fields. If you think of a pivot table, they can be different filters or different groupings or ways to build hierarchies of financial transactions.
You can create as many dimensions as needed. It’s a bit of a balance because you have to think about Data entry. Data entry is sort of the cost of a dimension and then reporting is the benefit. So, you have to weigh how many dimensions you want to record with the transaction and how they are being recorded. Generally, there are three main transactions- customer invoice, vendor invoice or journal entry.
Some examples of dimensions are departments, project, tradeshows, maybe a product family or product hierarchy of some sort, a customer group, market if your customers are in different market segments. You can kind of start with the key reports that management uses to run the business. The key metrics needed will define your dimensions – what you need to sort of slice and dice your data on and then you build them from that.
On the screen here is the dimensions – where you would create the number of dimensions. They have a Code and a Name and then within each dimension are the actual Dimension Values themselves. So For Department, it would be something like R&D, S&M and G&A. And then you might have a hierarchy. G&A could be a high-level view of the dimensions. So, within G&A you would have ADM, FIN, HR and IT. Then the Dimension Value Type would be a Total, so you could kind of build a hierarchy where you can drill down on dimensions.
So, you defined which dimensions you want to report on, what the actual values and hierarchy is within the dimensions and then you create the data entry rules for dimensions…” To learn more, view the video.
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– Jason has over 20 years of financial leadership experience in high growth technology companies. He is a Microsoft Certified Dynamics 365 Business Central Functional Consultant Associate. See Credential.