Performing Eliminations in Dynamics 365 Finance
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A client has multiple legal entities set up in Dynamics 365 Finance.
All companies and data reside in Dynamics 365 Finance.
The client currently uses a separate reporting tool to perform their financial consolidation and eliminations.
They want to use Dynamics 365 Finance instead.
You need to configure the system and correctly perform eliminations.
Solution: Create a separate company in which you manually create the eliminations.
Then, use that company in financial reporting or in the consolidation process.
Does the solution meet the goal?
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References: https://docs.microsoft.com/en-us/dynamics365/unified-operations/financials/budgeting/consolidation-elimination-overview.
The given solution proposes creating a separate company in Dynamics 365 Finance, which will manually create the eliminations, and then use that company in financial reporting or in the consolidation process. This solution could meet the client's goal of using Dynamics 365 Finance instead of a separate reporting tool to perform their financial consolidation and eliminations.
However, there are some considerations to keep in mind with this solution. First, creating a separate company for eliminations can lead to increased maintenance and management efforts. This new company will need to be kept up to date with any changes in the original legal entities, such as new accounts or transactions. Additionally, any changes made in the elimination company must be properly reflected in the original legal entities.
Second, manually creating eliminations can be time-consuming and error-prone. This approach could potentially result in inaccuracies or inconsistencies in the financial consolidation process. If the volume of eliminations is high, this solution may not be efficient.
An alternative approach to this solution could be to use the elimination ledger functionality in Dynamics 365 Finance. The elimination ledger allows for automatic elimination of intercompany transactions and can be integrated into the financial consolidation process. This approach would reduce the manual effort required for eliminations and provide more accurate and consistent results.
Therefore, the given solution of creating a separate company for eliminations could potentially meet the client's goal, but it is important to consider the potential maintenance and management efforts, as well as the risk of manual errors. The alternative approach of using the elimination ledger functionality may provide a more efficient and accurate solution.
