Mastering the Month End Close Process with Business Central: Tips and Tricks

• Limiting posting dates
• Deferrals
• User tasks
• Dimension maintenance

When periods are closed in most software, they are either hard-closes or soft-closes. Hard-closes are periods that are permanently committed to the entity’s database and are locked beyond ability to post to.

It is important to note that the Microsoft Dynamics 365 Business Central solution is a real-time ERP and does not, technically, have “hard-close” for a period end. The only way a month gets legitimately closed (i.e. closing entries are posted) is when you perform the year-end closing. As a result, the procedures outlined in these posts will demonstrate how to use soft-closing to administer your accounting records appropriately.

Note: Closing a period should happen after all your entries, invoices, bank reconciliations, adjustments, etc. for the period have been processed, as the closing process prevents posting to that period. This emphasizes the importance of ensuring that both internal procedures and system processes are aligned

To ensure integrity of data and reporting, you’ll want to be able to prevent posting to a period after all the necessary adjustments and entries have been posted to it.

There are two areas where you set the allowable posting dates:

• The General Ledger settings – this is where a blanket rule is applied to all users of the system;
• Individual’s User Setup settings – this is where you can allow specific individuals to have access to periods outside of the General Ledger settings above. This may be appropriate for a Controller or Assistant Controller, who are all responsible for making adjustments of closed periods in a thought out and deliberate manner.

Like with everything else in Business Central, the specific rule trumps the general – so if you don’t specify a specific allowance to a user, they’ll be subject to the general rule.

You can set the allowable posting dates for all users of the system:

• Go to General Ledger Setup by searching via Tell Me or by exploring Finance > General Ledger > Setup;
• Enter dates into the Allow Posting From and Allow Posting To fields to create a range of allowable posting dates. (Note: leaving a field blank will allow any date in the selected upper/lower bound.)

To have specific override rules for an individual, you can set this:

• Go to User Setup by searching via Tell Me or by exploring Administration > Users;
• Click “Edit” on the user’s ID (if user is already in the list) or click “New” and select the User ID from the field drop-down;
• Enter relevant dates in the Allow Posting From and Allow Posting To fields (Note: any fields left blank will inherit the rules from the General Ledger Setup above);

One time-saver for your month-end postings is utilizing the deferral functionality in the system. If you have, for example, a 12-month prepaid insurance entry that you want to post, you can use a Deferral Template on either an invoice line or the journal line.

In the example below for the purchase of insurance, we’ll use a 12-month straight-line deferral we created:

When we click on the ribbon for the lines, we can click on the Deferral Schedule:

We’ll see what the planned postings will be and can adjust accordingly:

After adjusting it to take effect on July 1^st, after posting you can see the ins-and-outs of the prepaid account:

Note that the accounting periods that the deferral posts to need to have been created/exist.

A highly-underrated feature of Business Central is the ability to create and assign recurring tasks to users in the system. For month-end, this becomes a particularly missed opportunity as month-end procedures tend to have dependencies and be more checklist-esque.

User Tasks can be assigned to users (e.g. John Doe) or User Task Groups (e.g. Accounts Payable Team).

In order to create these, simply search for User Tasks or explore to Administration, Users, User Tasks.

As seen in the image above, I created a new task and:

• Set the subject as appropriate (“Prior Month Payables”);
• Give it a meaningful description;
• Assigned it to a User/User Task Group (“ACCOUNTS PAYABLE”);
• Set a Due Date (5^th of the month);
• Set a Start Date (1^st of the month);
• [Optional] Link it to the Purchase Invoices page for a quick way for A/P to get there from the task page;

At this point, I want to make this something that happens every month, so I clicking the Recurrence button in the ribbon and fill out the recurrence as follows:

Which simply means recurrence starts January 1^st, for 12 periods, each 1 month apart.

Once I do that, all the User Tasks are created:

Now when someone in the ACCOUNTS PAYABLE User Task Group logs in and looks on their role centre, they will see a cue with the User Tasks:

Note: The “Current User Tasks” cue is a custom cue Extension I built to filter out tasks that are much later in the future.

The user who is assigned the task can then update the task as it progresses:

Or finish it and set a Completed Date on there.

You can use this data to create a month-end dashboard in Power BI to check the progress and status of month-end. Say you add a field to the User Task to set a month-end “Type Code” or even a prefix in the Subject or Task Description of “Month-End”:

The dimensionalization of data is a key piece to having reliable and relevant reporting. As such, it is a good practice to navigate to the values of each Dimension code you have in the system and blocking any inactive or unused Dimensions:

This will prevent users from posting to the Dimension and creating ‘bad data’ for reporting.

Quite often after performing a month-end, you will come across a series of adjustments that need to be made because users may have forgotten some Dimension or another on accounts.

Typically this becomes an issue with Income Statement accounts, as the bulk of Dimension reporting revolves around profit-and-loss reporting by some form of Dimension.

It then becomes pertinent to revisit Dimension validation rules periodically to ensure that you’re making the selection of Dimensions mandatory for the accounts that require them.

To set these Dimension validation rules simply navigate to the G/L Accounts / Customers / Vendors / Bank Accounts / Fixed Assets / etc. and select the ones you’d like to enforce some Dimension requirements on.

In the example below, we’re selecting all G/L Accounts with a Account Subcategory of “Vehicle Expenses”:

And then, in the ribbon, heading to Navigate, Account, Dimension, Dimensions-Multiple:

And making VEHICLE a mandatory Dimension Code:

This will then require users to select a VEHICLE Dimension Code when attempting to post to these G/L Accounts.

In the same vein as in the previous section, you may also find that users are entering incorrect combinations of Dimensions together. Following the same example above, users may be selecting a VEHICLE Code along with, say, the CUSTOMERGROUP Dimension, which perhaps doesn’t make sense in my business context.

Conversely, perhaps they’re using the VEHICLE Dimension along with, specifically, the “SALES” Department Code, which shouldn’t be allow for allocation of vehicle expenses.

Both those scenarios can be addressed using the Dimension Combination page.

To illustrate the first scenario, we would go to the intersection of VEHICLE and CUSTOMERGROUP codes and click into the lookup text there:

This pops up with options. In this case, I want to restrict all combinations between the two so I click “Blocked” and then OK:

If you select “Limited”, you can then specify specific VEHICLE and DEPARTMENT Codes that can’t be used together (e.g. the SALES Department Code with all the VEHICLE Codes):

I hope you found the tips and tricks in this article helpful! Make sure to keep an eye out for our upcoming series of articles on month end in Dynamics 365 Business Central.