We recently implemented Microsoft Dynamics 365 Finance & Supply Chain Management for the largest land-based salmon aquaculture farm in the world across three countries: the USA, Denmark, and Norway. The implementation included full financials as well as Operations (Warehouse Management, Asset Management, Production Control, etc.).
It required our team to be on-site working with the client to ensure success.
Today I would like to focus on the core financial requirements as the basic premise of an ERP to provide stakeholders with accurate, consolidated financials across their companies.
Although there are many aspects to a successful multi-entity/national implementation, there are a few essential requirements that must be met at the start of any implementation of an Enterprise resource planner (ERP):
1. Do we have the localizations for each country we are working on within the solution?
2. Are we consolidating financials across entities? If so, are we sharing our Chart of accounts?
3. Do we have a solid multi-currency engine that can manage account (Cash/Bank, AP, AR) revaluations for accurate financials?
Localization is a set of country-specific requirements that a client must meet to operate legally and efficiently within a said country. Examples of this are Tax reporting requirements such as integrating with the SKAT in Denmark and Norway. Reporting includes producing the proper VAT reports as well as electronically integrating with the tax authorities.
Additionally, a localization may have country-specific reporting requirements with regards to vendors and customers, among others.
Finally, there are language requirements, such as switching the language of the ERP to meet your end-users local needs.
Although country-specific localizations are not required, they are recommended as they will simplify reporting requirements, reduce potential errors, and allow your team to work on more value-added activities.
One of the strengths of D365F&SCM is the ability to share a chart of accounts across entities that facilities both reporting and minimizes errors due to accounts not being available in other companies. Using Account Chart Structure, we can further define which legal entities will use which accounts in the Global Chart of Accounts, further simplifying Finance and Accountings’ day-to-day tasks.
I cannot underscore how important this is for our client. By sharing one chart of accounts, they can utilize a “Shared Services” model in that accounting and finance tasks may be performed by one team at one location, in this case, the US team. Shared Services allows the other legal entities to focus on generating revenue and not having to manage a cost center and have the additional added benefit of reducing overhead, thus minimizing costs allocated to each entity.
Some countries require the use of a statutory chart of accounts. Examples are Mexico and Brazil, in which the state dictates the accounts that must be used in their internal ERP (for auditing purposes) as well as the Tax reporting.
D365F&SCM manages this rather seamlessly with the use of consolidation accounts, so even if you’re required to use statutory accounts, you can still roll up and generate consolidated financials with no issue.
Many organizations both sell and buy in a currency other than their local currency. Additionally, they might have bank accounts in different currencies that fund and receive cash from vendors and customers.
Due to the global nature of our client’s operations, they needed to be able to integrate with an exchange rate provider automatically to populate exchange rates daily. Proper exchange rates allow our client to revalue transactions at month-end for accurate reporting purposes.
Thanks to a simple but robust revaluation system in D365F&SCM, our client was able to speed up their month-end closing procedures. Utilizing the Business Process functionality in D365F&SCM, we were able to set up a month-end procedure and routines that our client could follow and execute, minimizing month-end close times and speeding up reporting to stakeholders.
These are, by far, not a complete list of requirements needed for a successful implementation. Still, they are essential to consider when choosing a solution and Consulting Partner to ensure they understand your companies’ needs and have the expertise and experience to deliver an end-to-end solution for your organization.
