Introduction to Financial Reports (Management Reporter) in D365FO or AX

It is already almost a year ago that I spoke at the Dynamics 365 Finance & Supply Chain Summit in Lisbon (Portugal). This is one of the meetings organized by the Power Community , where you certainly have to follow the LinkedIn page for to stay updated.

By thinking about relevant topics to speak about, at the end I have chosen for the 'Financial Reports' option in D365FO. For some people a surprise maybe, because this isn't a new fancy functionality. You can call it even old, already in AX 2012 you have the same option called Management Reporter.

But I visit a lot of organizations and it surprises me that some of them don't even know about this option. And based on the fact that my experience is that you have a lot of benefits quickly available by working with this reporting tool, I choose to spoke about this topic to give it more attention.

In this article I summarize the topics of this session so hopefully even more consultants and users will understand the benefits of this tool and the basics how to handle.

To make it consistent I use the same sheets I used during the summit:

What is Financial Reports / Management Reporter?

Financial Reports is a tool to create, maintain, deploy, and view financial statements from data in D365FO. The scope is the General Ledger, which means that you can create financial statements based on ledger transactions and budget transactions.

You don't need additional tooling or licenses to use this reporting functionality. Microsoft already provides you 22 default financial statements, which needs to be mapped to your main account setup to be able to use them. Also you can created your own financial statements based on a lot of options to choose from. And this is exactly why you need to know this option: you can create your 'own' financial statements with amounts presented how you want it, based on 'real time' data from D365FO.

Important to do before using the Financial Reports option in D365FO is to check if the prerequisites are correct already. You can check this at the option 'Financial Reporting setup' in the Ledger Setup options of the General Ledger module. In this form you can check if all financial dimensions are available to use in Financial Reports (and exclude some when you don't need them).

In the tab 'Attributes' you can decide if you want the Vendor and Customer name being available as well when it comes to transactional details in the reports for example on the Vendor balance or Customer balance accounts.

When these options are checked and ok, you can use the options of Financial Reports. In D365FO you can open this option from several modules, including the General Ledger module:

First you will find a form where the current available financial statements are presented. In this form you can click on the button 'New' or 'Edit' to open the Report Designer:

You have to download the Report Designer and when finished you have to login again with your D365FO credentials. Sometimes you have to wait a bit before the Report Designer will open, but at the end you will have an extra application open where the settings of the financial statements can be defined. Here you can change the setup of existing financial statements and create new statements. Each financial statements is created based on building blocks:

In each report you use at least three building blocks:

Row definitions: this is wat you relate to segment values or calculations to create the rows you want to present on the financial statement. You can think about links to individual main accounts (or total accounts, this is why the main account type 'total' is available in D365FO), main account categories or combinations of main accounts and financial dimensions. So for each row you can setup what kind of financial level you want to present.

Column definitions: Here you define the columns of your financial statement, based on the kind of amounts you want to present in the column (actuals, budget or calculation) and the periods that you want to present in the columns (like period, quarter, year). Unlike the Trial Balance in D365FO here you can present several different years in one report.

Report definition: Here you have the common settings of the report, like the rounding, how to present negative / credit amounts and also you link here the row definition and column definition to use in this financial report.

In addition to this, you can also use one more building block:

Reporting tree definition: This is what you use when you for example want to consolidate the amounts of multiple legal entities.

The combination of these building blocks, creates the financial statement. If you Generate the financial statement, the building blocks are combined and will generate the statement based on the reporting date you enter by generating:

The default reports and your own reports

Microsoft provides already 22 financial statements in D365FO:

Most of these rapports contains mapping with the main account categories which you can setup on the main accounts. To use these default reports the change is big that you need to check the mapping in the Report Designer at the Row definition, and change the mapping when you use other main account categories.

Also you can create your own financial statements where you start with empty Row definitions and Column definitions and start from scratch. Where to think about when you want to create your own financial statements?

Instruction how to create your own report

My experience with Financial Reporting is: keep it simple and people will quickly understand how the tool works. Based on that knowledge they can extend it when they need other things then the basic. But first, the basic. So in this example I make a very simple financial statement. Once you have build this for yourself, the next step can always come!

For opening the Financial Report designer, you have to click on 'New' or 'Edit' in the Financial Reports form:

You have to download the Report designer and you need to login again with your D365FO credentials. In the Report designer you will see the building blocks described above. By clicking on the arrow besides 'New', you can select what building block you want to create. In this example I focus on the Report definition, Row definition and Column definition:

Row definition

I start with creating a Row definition In the row definition you define the rows where to present amounts of in the financial statement. I make a very simple row overview:

In row 100 I select in column J the main account 401100 (Product sales). Based on that selection in column B the description of the statement is entered automatically but I can change if I want. In Column F I select that I want to 'Credit' this amount (because revenue is posted on the credit side in the ledger but for reporting purpose I want to turn it around to a debit amount).

In row 130 I add main account 500100 (Cost of Goods Sold - Finished Goods).

In row 190 I enter in column C the Format code 'TOT', which means Total. In Column D I enter that I want the total of row 100 (revenue) minus row 100 (cost of goods sold) to calculate the gross margin:

After saving I have the row definition able to use it in a report.

Column definition

Now I create a column definition. In this column definition I define the columns of the report where I select what kind of amounts I want to present (for example actuals or budget amounts) and over what period needs to be reported (month, or year amounts for example).

In Column A I select the column type 'DESC' to add the description from the row definition in the first column.

In Column B and C I add the column type 'FD' for the current period and Year to Date (YTD). In the print screen below you can see my example and all the column types available:

Report definition

Now I create a new Report Definition where all the settings for the financial statements comes together. I select here that I want to use the created Row and Column definition and can make additional settings like rounding, how to present credit amounts and so on:

Result

First I post a sales order where (besides customer balance and vat) revenue and cost of goods sold are posted in the general ledger:

These two main accounts are also used in the financial statement. Now in D365FO I run the report by clicking on the 'Generate' button and select the period where I want to report for:

D365FO will use the last day of that period to report. When the report is created by D365FO by clicking on the report date or select the row and click on 'view':

The result will be presented then:

In the column 'Current month' you can exactly see the amounts of the voucher presented above. In the second column 'YTD' (Year to date) you can see a higher amount of COGS, based on other postings as well in January. But the amounts presented here are directly reported from the General Ledger in D365FO based on the created reporting structure described above.

I have made a very small statement to give a simple example how you can report directly from the general ledger transactions based on your own classifications. But of course bigger reports and reports on higher level are possible:

My advices if you want to start?

1. Look at the Report definition, Row definition and Column definition of the 22 existing reports that D365FO already provides. Here you can see a lot of setup already and when you understand how these works, you can use this for your own reports as well.
2. First draw the report on a paper how you want to present the amounts from the ledger. When finished create the report in Financial Reports, so you have a goal to work to.
3. Search on the internet for 'Management Reporter' or 'Financial Reporter'. There are a lot of blogs and video's how to make reports.
4. Follow the Microsoft lab about creating a report.

I hope this helps!