Understanding master data

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by Cristina Nicolàs Lorente Laura Nicolàs Lorente | October 2013 | Enterprise Articles

This article by Cristina Nicolàs Lorente and Laura Nicolàs Lorente, the author of Microsoft Dynamics NAV Financial Management provides a brief introduction on master data.

(For more resources related to this topic, see here.)

Master data is all the key information to the operation of a business. Third-party companies, such as customers and vendors, are part of the master data. The items a company manufactures or sells are also part of the master data.

Many other things can be considered master data, such as the warehouses or locations, the resources, or the employees.

The first thing you have to do when you start using Dynamics NAV is load your master data into the system. Later on, you will keep growing your master data by adding new customers, for instance. To do so, you need to know which kind of information you have to provide.

Customers

We will open a customer card to see which kind of information is stored in Dynamics NAV about customers. To open a customer card, follow these steps:

  1. Navigate to Departments/Sales & Marketing/Sales/Customers.
  2. You will see a list of customers, find No. 10000 The Cannon Group PLC.
  3. Double-click on it to open its card, or select it and click on the View icon found on the Home tab of the ribbon.

The following screenshot shows the customer card for The Cannon Group PLC:

Customers are always referred to by their No., which is a code that identifies them. We can also provide the following information:

  • Name, Address, and Contact information. A Search Name can also be provided if you refer to your customer by its commercial name rather than by its fiscal name.
  • Invoicing information: It includes posting groups, price and discount rates, and so on. You may still not know what a posting group is, since this is the first time those words are mentioned in this article. At this moment, we can only tell you that posting groups are important. But it's not time to go through them yet.
  • Payments information: It includes when and how will we receive payments from the customer.
  • Shipping information: It explains how do we ship items to the customer.

Besides the information you see on the card, there is much other information we can introduce about customers. Take a look at the Navigate tab found on the ribbon.

Other information that can be entered is as follows:

  • Information about bank accounts so that we can know where can we request the payments. Multiple bank accounts can be set up for each customer.
  • Credit card information, in case customers pay using this procedure.
  • Prepayment information, in case you require your customers to pay in advance, either totally or partially.
  • Additional addresses where goods can be shipped (Ship-to Addresses).
  • Contacts: You may deal with different departments or individuals from your customers.
  • Relation between our items and the customer's items (Cross References).

But customers, just as any other master data record, do not only have information that users inform manually. They have a bunch of other information that is filled in automatically by the system as actions are performed:

  • History: You can see it on the right side of the card and it holds information such as how many quotes or orders are currently being processed or how many invoices and credit memos have been issued.
  • Entries: You can access the ledger entries of a customer through the Navigate tab. They hold the details of every single monetary transaction done (invoices, credit memos, payments, and so on).
  • Statistics: You can see them on the right side and they hold monetary information such as the amount in orders or what is the amount of goods or services that have been shipped but not yet invoiced.
  • The Balance: This is a sum of all invoices issued to the customer minus all payments received from the customer.

Not all the information we have seen on the customer card is mandatory. Actually, the only information that is required if you want to create a transaction is to give it a No. (its identification) and to fill in the posting group's fields (Gen. Bus. Posting Group and Customer Posting Group). All other information can be understood as default information and setup that will be used in transactions so that you don't have to write it down every single time. You don't want to write the customer's address in every single order or invoice, do you?

Items

Let's take a look now at an item card to see which kind of information is stored in Dynamics NAV about items. To open an item card, follow these steps:

  1. Navigate to Departments/Sales & Marketing/Inventory & Pricing/Items.
  2. You will see a list of items, find item 1000 Bicycle.
  3. Double-click on it to open its card.

The following screenshot shows the item card for item 1000 Bicycle:

As you can see in the screenshot, items first have a No., which is a code that identifies them. For an item, we can enter the following information:

  • Description: It's the item's description. A Search Description can also be provided if you better identify an item using a different name.
  • Base Unit of Measure: This is the unit of measure in which most quantities and other information such as Unit Cost or Unit Price for the item will be expressed. We will see later that other units of measure can be used as well, but the Base is the most important one and should be the smallest measure in which the item can be referred.
  • Classification: Item Category Code and Product Group Code fields offer a hierarchical classification to group items. The classification can fill in the invoicing information we will see in the next point.
  • Invoicing information: This includes posting groups, costing method used for the item, and so on.
  • Pricing information: This is the item's unit price and other pricing configuration.
  • Foreign trade information: This is needed if you have to do Instrastat reporting.
  • Replenishment, planning, item tracking, and warehouse information: These fast-tabs are not explained in detail because they are out of the scope of this article. They are used to determine how to store the stock and how to replenish it.

Besides the information you see on the item card, there is much other information we can introduce about items through the Navigate tab found on the ribbon.

As you can see, other information that can be entered is as follows:

  • Units of Measure: These is useful when you can sell your item either in units, boxes, or other units of measure at the same time.
  • Variants: These is useful when you have multiple items that are actually the same one (thus, they share most of the information) but with some slight differences. You can use variants to differentiate colors, sizes, or any other small difference you can think of.
  • Extended Texts: These is useful when you need long descriptions or technical info to be shown on documents.
  • Translations: These is used so that you can show an item's descriptions in other languages, depending on the language used by your customers.

As with customers, not all the information in the item card is mandatory.

Vendors, resources, and locations

We will start with third-parties: customers and vendors. They work exactly the same way. We will just look at customers, but everything we will explain about them can be applied to vendors as well. Then, we will look at items, and finally we will take a brief look at locations and resources.

You can apply to vendors the same concepts learned with customers, as they work exactly the same way. You can also apply to resources the concepts learned with items.

We have seen in detail how customers and items work as master data. You can apply the same concepts to other master data. For instance, vendors work exactly the same way as customers. The concepts learned can be used in resources and locations, and also to other master data such as G/L accounts, Fixed Assets, Employees, Service Items, and so on.

Summary

This article provides a brief introduction on master data. Also, we can add new customers, items, vendors, resources, and location into the master data when working with Microsoft Dynamics NAV.

Resources for Article:


Further resources on this subject:


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About the Author :


Cristina Nicolàs Lorente

Cristina Nicolàs Lorente has been working with Dynamics NAV since 2005. She started in the ERP world as a developer, but soon evolved to a complete Dynamics NAV professional, doing all the tasks involved in Dynamics NAV implementation: consultancy, analysis, development, implementation, training, and support to end users.

When Cristina started developing solutions for Dynamics NAV she had no idea about accounting or about any kind of business workflows. They don't teach those kind of things for a technical university career. Soon she discovered that it is important to know the set of tools used, but even more important to understand the meaning of whatever you develop. Without knowing the accounting rules, practices, and legal requirements, it is impossible to develop useful accounting functionalities even if you are the best developer. Only when you fully understand a company's processes you will be able to do the appropriate de velopments.

Having that in mind, she has taken courses in Accounting, Warehouse Management, and Operations Management. She is also willing to take courses on any other company related topics.

She thinks that the best way to learn is to teach what you are learning to someone else. She has actually learned almost everything she knows about Dynamics NAV by responding to user questions on internet forums, by writing a blog about Dynamics NAV, and of course by writing the book you have in your hands. When you have to write about something, you have to experiment, try, investigate, and read. It is definitely the best way to learn.

Cristina is also co-author of the book Implementing Microsoft Dynamics NAV 2013, which had really good comments coming from different Dynamics NAV experts.

Laura Nicolàs Lorente

Laura Nicolàs Lorente started to work with Dynamics NAV back in 2005, first in the support department, mostly solving functional issues and doubts. She soon jumped to full deployment: consulting, analysis, development, implementation,
migration, training, and support.

Right from the beginning she realized that it was very important for a Dynamics NAV consultant to have a deep knowledge of business workflows. Technical skills are just not enough. So she started to train herself accounting, taxation, supply chain, logistics, and so on. She discovered a whole new world and she found it very interesting.

After having enough consultancy experience, she got to manage the first project on her own. And then she realized that tech and business knowledge is not enough: she also needed management skills. This is why after reading different management books and trying different approaches on the projects she worked on, she decided to deepen her knowledge by taking a Masters in Project Management. She is now transitioning to Agile Management and Agile Development for better project success.

She continues her training in the three areas (tech, business workflows, and management) whenever she gets the chance.

The net is a huge source of inspiration for her: groups, forums, blogs, books, and so on. She also contributes by sharing her knowledge and experience with the Spanish Dynamics NAV community.

Laura is also co-author of the book Implementing Microsoft Dynamics NAV 2013, which had really good comments coming from different Dynamics NAV experts.

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