budget planning in ax 2012 r2
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Budget Planning in AX 2012 R2TRANSCRIPT
Budget Planning in AX 2012 R2
K3 BLOGAX 15 JAN 2013 3:30 AM
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Background
Prior to Microsoft Dynamics AX 2012, budgeting was an unsophisticated
process with basic setup, intended mainly for use in financial statements.
The ability to define budgets in a hierarchical structure was restricted to the
creation of budget models and sub-models against which ledger budgets
could be entered, while integration to other areas was limited to the
generation of ledger budgets from budget data entered against fixed assets
and projects. There was also no process to review and sign off a new budget,
or to approve changes to an existing budget.
In Microsoft Dynamics AX 2012, major changes and improvements to
budgeting were introduced, which included the introduction of a Budgeting
module in its own right, separate from the General Ledger. As part of the
release of Microsoft Dynamics AX 2012 for Public Sector, Microsoft
recognised the demand from public and larger private sector organisations
for more sophisticated budgeting solutions, including budget control, so
ledger budgets were replaced by budget registers and workflows were
introduced to allow budget register entries to be routed around the
organisation for review and approval.
Budget control is prevalent in the public sector and is used by organisations
to calculate available funds when goods and services are procured, by
checking the requirement against a budget, taking into account actual
expenditure, together with current and future commitments. Depending on
how budget control has been configured in Microsoft Dynamics AX 2012 in
line with the organisation’s policies, the user will either be warned of the
potential overspend or can be prevented from progressing the transaction.
Budget Planning
With the release of Microsoft Dynamics AX 2012 R2, budget planning has
now been added to the Budgeting module. This will appeal particularly to
organisations that have formal and structured budgeting processes, where
responsibility for the preparation and submission of budgets is delegated
down to budget holders throughout the organisation and where budgets
have to be rolled up, possibly to multiple levels, with a review and approval
at each level.
Budget planning represents the processes which take place prior to a budget
being entered into the Budgeting module and indeed there is an option to
create budget register entries from the lines on an approved plan.
A budget plan consists of a budget plan header, budget plan lines, and
budget plan line details.
Multiple processes can be defined which reflect the organisation’s preferred
budgeting approach, for example a top-down approach is supported by
developing a single high-level budget plan and then allocating the budget to
lower levels within the organisation, while a bottom-up approach allows
multiple plans prepared at a low-level to be consolidated into a high-level
parent plan. Each planning process can be linked to a different budget cycle,
so that the scope of a budget plan can be flexible and not restricted to a
single fiscal year, and to a different ledger, allowing multiple plans for
multiple legal entities to be administered from a single AX company.
As well as using features introduced in Microsoft Dynamics AX 2012, such as
role-based security, account structures, and account rules, new budget
planning advanced rules have been added which allow budget plans to
include financial dimensions which are not part of the General Ledger
account structures.
Scenarios
Budget plan lines are entered against a scenario. A single budget plan can
contain multiple scenarios, each of which represents a different version of
the budget plan. Examples of scenarios could include:
Previous year’s actuals
Worst-case
Best-case
Scenarios can be defined as monetary or as quantity-based (with a unit of
measure) if the scenario includes non-financial data, e.g. number of jobs,
number of employees.
When a budget plan is being reviewed for approval, the reviewer can choose
to allocate lines from one scenario to another, depending on how the read-
write access levels have been configured for the scenarios at that stage in
the budget plan process.
Organisation hierarchies
When configuring each business planning process, you need to select the
organisation hierarchy which will be used to define the operating unit
structure for budget planning, as well as the person responsible for
preparing, submitting, reviewing and approving the plan at each level. The
organisation hierarchy can then also be used to provide a view of the budget
from every level in the organisation.
A new organisation hierarchy purpose for budget planning has been
introduced and should be assigned to any organisation hierarchy which is to
be used in a budget planning process.
Budget templates & justification documents
Budgets can be entered manually onto the lines of a budget plan but most
organisations will be used to preparing budgets in Excel and will want the
option to continue doing so. As part of the new budget planning features,
budget planning web services have been introduced specifically to support
the creation of budget plan templates in Excel and budget justification
documents in Microsoft Word, both using the Office Add-ins which were
introduced in Microsoft Dynamics AX 2012.
In a budget plan worksheet, budget plan data can be charted, analysed, and
modified in Excel, before being published back to the budget plan lines.
In a justification document, information is exported from the budget plan to
Word; standard Word features can be used to add text and comments, and
to track changes.
Worksheets and documents which are created from these templates are
automatically attached to the budget plan when it is submitted to workflow
and can be viewed directly from the budget plan.
Workflow
As part of the setup of a business planning purpose, workflows can be
configured for the review and approval of budget plans, reflecting the
policies and requirements of the organisation.
A new Budget plan workflow is available which includes a new Approve
budget plantask, as well as a number of automated tasks to automatically
generate child (operating unit) budget plans and to update the stage and
status of a budget plan.
The workflow queries the selected organisation hierarchy when assigning a
workflow task to a budget holder or manager.
Integration
As well as organisation hierarchies, budget planning is integrated with other
Microsoft Dynamics AX 2012 R2 modules, so that budget plans can be
populated with data from the following sources:
Budgeting – previous budget plans
General Ledger – actual transactions
Fixed assets – fixed asset budgets
Human Resources – forecast positions
Reporting
A new Budget Planning Analysis Data Cube is provided which allows budget
planning data to be analysed, such as:
Budgeted net income
Percentage of budget plans completed