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Purpose of setting up operating units

  • 1.  Purpose of setting up operating units

    TOP CONTRIBUTOR
    Posted May 18, 2020 10:58 PM
    Hi

    Please guide me whats the purpose of setting up operating units

    Also once a new department is set up under the financial dimension, whats the purpose to add same department  under department  in operating units

    here is the more details of set up

    Open a form for operating units by using one of the following paths:

    • Click Organization administration > Setup > Organization > Operating units.

    • Click General ledger > Setup > Organization > Business units.

    • Click General ledger > Setup > Organization > Cost centers.

    • Click General ledger > Setup > Organization > Departments.

    thanks and kind regards
    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 2.  RE: Purpose of setting up operating units

    TOP CONTRIBUTOR
    Posted May 19, 2020 08:10 AM
    In my experience, it is always a good idea to set up operating units whenever possible and make the financial dimensions entity-backed (rather than custom dimensions).  They can be used in organization hierarchies, whereas just financial dimensions cannot be.  In using organization hierarchies, you can use for security, budget planning or even financial reporting - I don't really see a downside to making departments etc. organization units as much as possible and then making the financial dimension an entity-backed one.  The functions on a dimension still can be maintained (such as legal entity specific settings, adding responsible party for expenditure reviewers, etc.  )

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    Shirley Adams
    Solution Architect
    AKA Enterprise Solutions
    New York NY
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    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 3.  RE: Purpose of setting up operating units

    Posted May 20, 2020 10:32 AM
    Hi Najeem,

    Each operating unit type has its own purpose. Retail channel, for instance, links to the retail stores of different kinds, Value stream in production segregation and reporting, and the rest for financial reporting. Org hierarchy units are more for reporting and structuring enterprise organizations in a streamlined manner, making reporting more directional, focused and crisp.

    Best Regards,
    Nanditha

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    Nanditha Kini Mukerjee
    Senior Manager- Presales
    Synoptek
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    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


  • 4.  RE: Purpose of setting up operating units

    GOLD CONTRIBUTOR
    Posted May 21, 2020 02:15 AM
    I would just like to add my two cents on this.

    Operating units is a good concept to consolidate the various reporting perspectives/ units (e.g. department, branch, retail channel value stream etc.) under one umbrella. 

    • You can use Department as an operating unit and add for example: If you use HRM features the Department operating units can be linked to positions. (You can alternatively consider using a Branch/ Retail channel / business unit based on your actual needs)
    • From Financial dimension page you can then select the function "Entity backed dimensions" to define your operating unit as an entity-backed dimension in your case Department.
    • You can now also use the Financial Dimension ( "Department" in your case) as per your transactional needs.

    Directly using an Operating unit (without configuring a Financial Dimension) for posting transactions is not possible.

    The question to ask here before making any decision of using the operating unit or financial dimensions is what am I setting these for?
    Do I want to use them for transactional needs or for reporting by setting up organisational position hierarchies, etc?

    To be noted:
    • You should avoid using operating units to setup legal entities as many legal reporting functionalities (tax reports etc) are linked to the legal entity and not the operating unit. This again but depends upon the business needs.
    Refer the below link for more details:
    https://docs.microsoft.com/en-us/dynamics365/finance/general-ledger/financial-dimensions

    Hope this helps

    ------------------------------
    Shilpi Thakur
    Freelance AX/D365 Microsoft Consultant
    Dynact Consulting Ltd
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    The first step toward cloud success. - Migrate from AX to D365 with expert guidance from Microsoft. I'm Ready


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