Financial Tags in Microsoft Dynamics 365 Finance: A long-awaited feature is finally here

As part of continuous improvements to Dynamics 365 Finance, Microsoft has released the long-awaited Financial tags feature. Many of my customers, especially financial planning and analysis (FP&A) teams, have asked for this feature for some time.

Why Financial Tags

Traditional Financial dimensions in D365 allow users to report and post by department, cost center, and more. However, you would not use a financial dimension if:

1. There are a lot of values in the list, which creates performance challenges and overkill
2. You want the ability to modify the dimension value after posting

Financial tags will fulfill both of those gaps. Now you can change the value of the tag after posting or use a tag for a list with a lot of values.

Some practical examples

1. Stock # - Solar company or auto reseller wants to keep track of all the transactions for a specific unit throughout the life of an asset.
2. Vendor accruals - Keep track of accrued expenses by vendor in the General Ledger, instead of maintaining Excel files outside the system to track Vendor ID for expenses coming through accrual entries.
3. Lot - Expense tracking by specific lots, value add, etc. going directly through AP/GL
4. Marketing campaigns - tracking marketing campaigns is not a perfect candidate for a financial dimension as you don’t want to keep adding too many financial dimensions. But Financial tags can serve this purpose to track expenses by marketing campaign.

Financial tag values used within D365 are not critical for financial reporting outside the company, but they can be important for the internal reporting by FP&A teams. These teams need the ability to make changes to transactions after posting rather than reclass journal entries.

Here are a few highlights: