Budget Planning Overview
Budget Planning in Dynamics AX 2012 has some complexity for sure, but once this is configured properly it can be a very useful tool to managing your organization’s budget processing. Many of our customers in the financial services and professional services space want to use Dynamics 365 and Finance and Operations For our demo (presented in a video at the bottom of this post), we will create our own Budget Plan in an AX 2012 demo environment. This demo will walk through the setup/configuration for our plan. Then we will create a new plan and walk through its execution to completion. Before beginning any Budget Plan, we need to outline what our budget planning process is going to be. This process will drive what and how we will configure AX. It is critical that you invest the time and effort to fully document your organization’s process (as is or to be) from end to end. Determine the steps of this process, what data elements are part of this process, which business units are engaged as part of this process, who should have access to this process, and how communication will occur about this process. For this demo, our ‘process’ will be as follows: Finance will generate the baseline budget for the upcoming fiscal year Budget will be based by departments This baseline budget will be distributed to these departments The departments will review and adjust if needed Each department will submit its updated budgets back to the Finance team Once all departments have done this, the CFO will review, adjust, and approve the budget Alright, let’s dive into our configuration. Here are some notes.
Create a hierarchy that will be used as the basis for our budget plan. This is how we will determine what business units will be used for our Budget Plan. When you create this hierarchy, you will need to assign an Organization Hierarchy purpose of ‘Budget planning’ and ‘Security’.
Budget Planning Configuration
Scenarios represent the data elements that will be used during the budget planning process. These scenarios typically are monetary values representing various elements, but can also represent other values that you might use for this process. Scenarios we will use for this demo:
- Previous Year Actual
- Previous Year Budgeted
- Department Requested
- Total Approved
These are the steps that our Budget Plan will walk through during the budget planning process:
Workflows are the engine that drive the budget planning process. These will allow you to move the process through the various stages. We need to create two workflows for this budget planning process:
- A ‘Header’ workflow for the overall process
- A ‘Detail’ workflow for the department review and submission
- Once created, workflows are added to the budget planning configuration.
These schedules are the tool used to move budget amounts from scenario to scenario. For each schedule, you select the Source & Destination scenario and the allocation method. This defines the movement of values from plan sheet to another (overall / department) or to other columns in the same plan sheet.
This is where you now assign the workflow and stages together with the allocation schedules. This assignment then drives the movement of your budget values as they progress through the stages in the budget plan. As each step is executed in the workflow, it will execute these defined schedules.
Here is where we determine what values can be visible and/or edited as they go through the budget plan stages.
These are the folders where the budget plan templates/plans will be stored.
These are the templates that can be used for budget plans. These can either be built out manually or generated by a Wizard. On these templates, you determine what values will display
Security for the budget planning process is done one of two ways:
Based on worker positions
Based on security organizations. This is configured in the budget planning parameters.
Organization hierarchy purpose
On the Organization Hierarchy, you need to ALSO assign the purpose of ‘Security’. This allows you to assign specific nodes in the hierarchy to specific resources.
In the User you can assign nodes based on the hierarchy selected. Must have a security role of either ‘Budget Manager’ or ‘Budget Clerk’ to assign this access. Must also have either role to access Budget Planning in general.
Budget plan processing
To begin the actual budgeting process, you need to create a Budget Planning Process. This is essentially a new Budget Plan. From this you can generate budget plan sheets and manage your budget process from start to end.
Generate budget plans
Now once the Budget Plan Process is activated, you can go to the Periodic functions to generate the Budget Plan. A new plan can be done manually also if you want, but most likely the initial numbers will be generated from another source. To do this, go to Periodic functions. Find the Budget Plan Generation menu, and then select the ‘Generate budget plan from general ledger’ function.
Do this to generate a new Budget Plan for your process. We will generate three separate scenarios in this plan:
- Previous Year Actual
- Previous Year Budget
This will be the starting point for our process. As we have no actual prior budget plan for our example, we will make one from a previous year’s actual numbers. We will update these slightly during our generation to make each scenario distinct. Once this is done you can go to the newly created Budget Plan to see the values generated for each scenario.
The next step is to create three Associated budget plans. These are one for each department that is in our hierarchy. To do this we will manually create these plans.
Budget plan process
Once these are created, we are ready to move forward with our actual budget process. Go back to the original Budget Plan to start this process. Click the Submit button to initiate the workflow process for this Budget Plan.
Workflow of Budget Plan
This will distribute the Finance budget plan values to the Department budget plans.
Each Department will review and/or update their own Budget Plan. Once this is complete, each will Submit their portion of the plan back to the Finance team.
Submission of Budget Back to Finance
Then, once all the Department plans are submitted back, the CFO can review and approve the final plan:
- CFO Budget Approval
- CFO Budget Approval
This will complete the approval process for this budget plan.
Generate budget register entry
Once the Budget Plan is complete, the final step is to generate a budget register entry from your Budget Plan. This will take your new budget and allow you to post it as your original budget for the upcoming fiscal year.
Now your budget planning process is complete. Watch the process from end to end here: