So far, we have covered the most important aspects of financial management with Dynamics NAV. But the application has a lot more possibilities regarding accounting and financial management. In this chapter, we will briefly explain all the other possibilities, which include the following topics:
Currencies
Intercompany postings
Accounting implications of other areas
XBRL
E-services and document management
Different countries use different currencies. The application can post transactions such as invoices or payments in different currencies and translate them into the local currency (LCY) according to the corresponding exchange rate.
Imagine that your local currency is Euro (EUR) and you sell your products or services to the United States of America, where the currency used is Dollar (USD).
You would first assign the USD currency to all those customers who do use this currency. You do so in the Currency Code field found in the Foreign Trade FastTab of the customer card.
Then, you would inform the correct exchange rate by navigating to Departments | Financial Management | Periodic Activities | Currency | Currencies, selecting the appropriate currency, and clicking on Exchange Rate, as shown in the following screenshot:
Intercompany postings are useful when you manage multiple companies at the same time and those companies do transactions between them (that is, a subsidiary company buys or sells products or services to another subsidiary company).
The intercompany functionality allows you to define the mapping between the items and chart of accounts of company A and the items and chart of accounts of company B. When company A wants to buy items from company B, company A creates a purchase order and then sends it electronically to company B. In company B, a sales order is automatically created with the appropriate items or G/L accounts. This way, the information is introduced only once and carried to the corresponding companies in the corresponding way.
Intercompany postings use a number of entries and documents for the relevant transactions:
General journal entries
Purchase and sales orders
Purchase and sales invoices
Credit memos
Return orders
To set up Intercompany postings, the company...
In this book, we saw the financial management of Dynamics NAV and also the accounting implication the sales and the purchase areas have. Other functional areas such as jobs, service, warehouse, or manufacturing also have some kind of accounting implications that will be briefly explained in this section.
The Job functional area is meant to manage projects and perform tasks such as configuring the job, scheduling resources, monitor progress, and so on.
This area has two kinds of accounting implications, which are as follows:
It can create sales invoices. The accounting implication of those sales invoices are the same as regular sales invoices.
Work in Process (WIP) can be calculated and posted to the general ledger. Multiple WIP methods can be configured to calculate WIP for a specific job.
eXtensible Business Reporting Language (XBRL) is a global standard for exchanging business information such as financial statements or other such information. Dynamics NAV can export financial data using the XBRL standard.
The idea is that someone who wants to get financial information from you would provide you a taxonomy (an XML document), which would contain one or more schemas with lines you should fill out. You would import this taxonomy into the program and fill out the schema or schemas by entering the account or accounts that correspond to each line in the schema and other required information. Once it is filled out, export it from the application and send it to the requester.
Microsoft dynamics NAV 2016 allows you to capture and store invoices and credit memos as incoming documents and use them to create corresponding purchase documents or journal lines. As an alternative to e-mailing as file attachments, you can send and receive documents electronically. By electronic document, we mean a standard-compliant file representing a business document, such as an invoice from a vendor that you can receive and convert to a purchase invoice in Microsoft Dynamics NAV. The exchange of electronic documents between two trading partners is performed by an external provider of document exchange services.
The Microsoft Dynamics NAV 2016 version supports sending and receiving electronic invoices and credit memos in the PEPPOL format, which is supported by the largest providers of document exchange services. A major provider of document exchange services is preconfigured and ready to be set up for your company. You can perform the Document Exchange Service setup by navigating to Departments | Administration | IT Administration | Services | Document Exchange Service setup:
Once you enable the Document Exchange Service setup, these Job Queue entries will be auto-created:
From PDF or image files representing incoming documents, you can have an external Optical Character Recognition (OCR) service to create electronic documents that you can then convert to document records in Microsoft Dynamics NAV, like for electronic PEPPOL documents. For example, when you receive an invoice in the PDF format from your vendor, you can send it to the OCR service from the Incoming Documents window. After a few seconds, you will receive the file back as an electronic invoice that can be converted to a purchase invoice for the vendor. If you send the file to the OCR service by e-mail, then a new incoming document record is automatically created when you receive the electronic document back.
Then, you can set up the OCR service by navigating to Departments | Administration | IT Administration | Services | OCR Service setup:
Once you enable the OCR setup, these Job Queue entries will be auto-created:
You can send attachments by e-mail from Microsoft Dynamics NAV. The default e-mail sender address is based on the settings in the SMTP Mail Setup window. If SMTP is not configured or Outlook is not available, the .pdf file will open instead.
Then, you can perform the SMTP Mail setup by navigating to Departments | Administration | IT Administration | Services | SMTP Mail setup:
We can test the whole process in Sales Invoice and send it electronically. For this, check the following steps:
Create the sales invoice by navigating to Departments | Sales Marketing | Sales Invoice.
Select 10000 as the customer number.
Select the Bicycle item in the Lines area with the quantity 1.
Action pane, click on Post and send it as follows:
In this chapter, you learned about other possibilities of the financial management area of Dynamics NAV, such as the use of multiple currencies, intercompany postings, the accounting implications of other areas, the XBRL standard for reporting business information, document exchange by PEPPOL, and LCS.
In the next chapter, we will work on fixed assets, where we will see the complete life cycle of fixed asset from acquisition to disposal, maintenance expenses, budgeted asset, and how to insure fixed assets in NAV 2016.
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