Consolidating Budgets with the Right Allocation Method in Microsoft Dynamics 365 Finance
Question
You work as the Finance Director for a company.The company uses Microsoft Dynamics 365 Finance for its accounting system.
The company has several financial dimensions and an organizational hierarchy configured for budgeting.
You are configuring budgets within the organization.You need to configure the correct allocation method to distribute the data in a budget plan to accurately portray the projected amounts.
Several budget plans have been configured at lower levels within the organization.You need to consolidate the lower level budgets into a budget at a higher level within the organization.
Which of the following allocation methods meets the requirement?
Answers
Explanations
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A. B. C. D.A.
https://docs.microsoft.com/en-us/dynamics365/finance/budgeting/budget-planning-data-allocationSure, I can provide you with a detailed explanation of the allocation methods in Microsoft Dynamics 365 Finance and which one is suitable for consolidating lower-level budgets into a higher-level budget.
Allocation Methods: Microsoft Dynamics 365 Finance offers four different allocation methods to distribute the amounts across various dimensions or entities within the organization. These are:
Aggregate: The Aggregate method is used when you want to combine the amounts from different accounts or financial dimensions into one entity. For example, if you want to create a budget for a particular department, you can aggregate the amounts from different accounts or financial dimensions related to that department.
Distribute: The Distribute method is used when you want to distribute the amounts from one entity to multiple entities based on a specific criteria or rule. For example, if you want to distribute the marketing budget across different regions based on their sales revenue, you can use the Distribute method.
Allocate to dimension: The Allocate to dimension method is used when you want to allocate the amounts from one dimension to another dimension. For example, if you want to allocate the marketing budget from the department dimension to the region dimension, you can use the Allocate to dimension method.
Copy from budget plan: The Copy from budget plan method is used when you want to copy the amounts from one budget plan to another budget plan.
Consolidating Lower-Level Budgets into a Higher-Level Budget: To consolidate the lower-level budgets into a higher-level budget, you need to use the Aggregate method. The Aggregate method will allow you to combine the amounts from different budget plans at the lower level into one budget plan at the higher level. For example, if you have created several budget plans for different departments within your organization, you can use the Aggregate method to consolidate these budgets into a higher-level budget plan for the entire organization.
In conclusion, the correct allocation method to consolidate lower-level budgets into a higher-level budget in Microsoft Dynamics 365 Finance is the Aggregate method.
