Budget planning for the One Version era in Microsoft Dynamics 365 Finance and Operations

Setup and configuration of budget planning has a lot of moving parts. Any misalignment of setup may stop the planning process and impact downstream execution in a range of ways.

A strong budget plan can boost collaboration and offer a single source of truth, as well as providing stronger financial reporting insights. Microsoft Dynamics 365 for Finance and Operations (D365FO) has a separate module called Budgeting that aids in the process. In this article we will look at the business scenarios enabled with this feature in D365FO and how the move to One Version, the continuously updated cloud approach to the product, will impact it. 

Typically a budget planning administrator is expected to work with business analysts and subject matter experts to configure the Budgeting module.  Below is a visual depiction of the module and setup section.

Now let's get straight into key setup and configuration considerations starting with budgeting dimensions.

Budget planning process

The budget planning process is the binding element which keeps the collaborative effort together.

Users need to activate a budget planning process before using it. The planning process covers the legal entity, budget cycle (time horizon), account structure, organization hierarchy, workflow association with operating units as well as rules and layout options for different  workflows.

This screenshot shows one possible setup, but you can also define alternative layouts.

Budget cycle time

The budget cycle time gives the time window for the planning process and can be mapped to a fiscal year or be user defined for long range planning.

Organization hierarchy with budget planning purpose code

The organization hierarchy can be helpful in budget planning. When creating such a hierarchy, users need to set the purpose as 'Budget planning' within the dropdown menu.

Budget planning has an extra level of security which ensures only those authorized to view information will be able to view it.

There are three security roles for budget planning which can be assigned to users. They include:

• Budget clerk – An 'Activity' type role
• Budget contributor – A 'Team' type role
• Budget manager - An 'Operations' type role

Employees linked to the user must have a position in the department to be able to access the budget plan and work on it. Below are some examples of positions in finance and sales and marketing departments assigned to a user to facilitate the process.

Next, we define elements that control the storage and movement of information. In this example, monetary information is stored in different "buckets."

Budget planning configuration

This step defines stages to be used in the different planning workflows.

 It's important to define allocation rules to move various information across plans.

The commonly used allocation techniques  are:

• Distribution - used in a top down approach to pass information from parent plans to child plans
• Aggregation - used in a bottom up approach to pass information from  child plans to parent plans
• Period allocation - Spreading information using a key
• Allocation rule - Using budget allocation rules

These allocation rules are combined with stages to trigger execution from the budget plan workflow.

Although you can use many different stage allocations as triggers, they must match the timing of the workflow.

Now we define how to segment the scenario information in different time buckets, presenting it using columns and layouts. In the column we specify which scenario is represented by the time period factor.

Under the Layouts tab, we define which columns to show. You can also show descriptions for the ledger account segment.