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Are You Utilizing Core Financial Management Features in Dynamics NAV?

Published Date
Author Teresa Peitsmeyer & Telka Clem

With the release of Dynamics NAV 2016, Microsoft added time-saving features to the core Financial Management functionality, and NAV 2017 (and each subsequent annual release) continues to improve on them, enabling Finance and Accounting functionality to get better and faster.  Users can streamline bookkeeping and enable more sophisticated control over complex transactions.

Here are four of the most important additions and enhancements to NAV for Financial Management:

  1. Bank Reconciliation

Dynamics NAV now streamlines one of the most fundamental accounting tasks: reconciling your General Ledger cash account(s) against the statements provided by your bank(s). Improvements to the Bank Account Reconciliation function speed the time it takes to match cleared transactions, helping you quickly identify and resolve any discrepancies.

The improvements begin with NAV’s Data Exchange Framework, which allows you to build import templates that map the statement format used by your bank to the corresponding fields on the NAV Bank Reconciliation. You can create multiple templates if you have accounts at more than one financial institution.

With the template defined, you can import statement files directly into NAV 2016 or NAV 2017. Enter the account number and statement ending date on the reconciliation page, and the statement entries are displayed side-by-side with the posted NAV entries.

Even if you don’t take advantage of the statement import option, the manual reconciliation process has been made much faster. You can use the “Suggest Line” functionality to copy the NAV ledger entries to the statement side of the reconciliation. Any transactions which did not clear may be easily unmatched by deleting them from that side of the page.

If you see statement activity that does not appear in the NAV ledger, you can record the transaction from the reconciliation screen and post it to NAV as a journal entry. It will immediately appear on both sides of the Bank Reconciliation page so these may be matched without leaving that screen.  For more serious discrepancies, e.g., amounts that are different or wrong, you can flag the transaction as a “difference,” un-match it, and resolve it during next reconciliation cycle.

  1. Positive Pay

Positive pay offers another way to ensure that the General Ledger in NAV 2016/2017 stays in sync with your bank to prevent discrepancies that may indicate check fraud. This feature is also built on the Data Exchange Framework. In the case of Positive Pay, you define custom export templates that transmit authorized check payment information to your bank.

NAV 2016/2017 includes pre-built export templates for Bank of America and Citibank. You can define templates for other institutions based on information they provide or engage Western Computer to help with setup. You can create multiple templates, so you can issue Positive Pay files to multiple banks for multiple accounts.

With a template in place, NAV 2016/2017 creates a Positive Pay file that you can upload or email to your bank. You can then update NAV with the confirmation number received to quickly locate any discrepancies later flagged by the bank.

  1. Revenue Deferrals and Prepaid Expenses

NAV 2016/2017 simplifies the complex accounting associated with deferred revenue (subscription services, product warranties, etc.) as well as prepaid expenses. This feature allows you to create a single transaction to distribute revenue or prepaid expense(s) over time, with future transactions automatically posted to the General Ledger at the proper intervals. You no longer have to rely on recurring Journal entries after the fact.

To get started, you define one or more deferral templates in NAV 2016/2017. The template specifies a fixed amount or percentage of revenue/expense to be distributed over time, start date, duration, and calculation method (e.g., daily, monthly, or user-defined). You can create as many templates as you need to reflect the deferral models represented by the sales and prepaid expense requirements of your business. The Balance Sheet account to be used is specified on each deferral template, while the Income Statement accounts are entered on the lines of the document or journal entry (in conjunction with that deferral template).

After you define one or more deferral templates, you may set one of these as a default code on an Item, Resource, or G/L Account master record. Alternatively, templates may be manually selected per transaction.

  1. Posting Preview

If you’re using Deferred Revenue or Expenses, you’ll find the new Posting Preview action especially useful. This powerful feature allows you see all the entries that will be created by the transaction you are preparing to post.

This preview is available on journal entries, receivables, payables, and service documents. When you launch the preview, NAV shows you the impact of the transaction across all involved sub-ledgers (Customer Ledger, Vendor Ledger, etc.) as well as the G/L. For sales that include deferred revenue, this means you can see the value of the items coming out of inventory as well as the portion of the sale and COGS recorded during each period.

With these enhanced features, Dynamics NAV becomes even more appealing to Finance and Accounting professionals—and to the business owners who rely on financial decision making. For more detailed descriptions of these and other Financial Management features, including video demonstrations, visit the Resource Library on http://www.westerncomputer.com and check out our on-demand webinars.

Are you utilizing the above features? How have they affected your business processes? What financial features are you looking forward to in the pending release of NAV 2018? Comment below to get the conversation started.