Creating financial reporting in Business Central empowers businesses to analyze the company’s financial health and performance to track expenses and profit margins consistently.
An organization’s financial performance ensures how long a company can sustain and thrive in its landscape. It is vital for an organization to analyze their performance, detect the wrong decision, and fix it promptly.
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Hence, financial reporting comes into play that allows companies to leverage their existing data sets and convert them into visuals to analyze and draw conclusions.
The report allows companies to identify trends and patterns, ensure tax compliance, track and analyze cash flow, identify risks associated with cash flow, and make informed decisions.
However, inaccurate financial reporting can also cost your business. It can lead to wasted time and resources, noncompliance with tax reporting, hefty penalties, a shortage of cash while paying the bills, and a loss of credibility.
Business Central allows you to leverage in-built reporting capabilities to make an accurate and wide range of financial reports to fulfill your unique needs. It empowers you to generate, manage, and analyze financial data more accurately and effectively.
Businesses need to create a financial report in Business Central first to leverage these benefits and analyze their financial health. Creating a financial report is straightforward. Let’s delve into financial report types, features, and how to create reports in Business Central.
What are financial reports in Business Central?
A financial report is a detailed review of financial data, which includes documents or statements, such as balance sheets and profit & loss, at a specific time.
In Business Central, a financial report is a combination of three things:
A row definition
A column definition
A few parameters of reports
Rows decide what is reported, such as revenue, cost of sales, and operating expenses. Whereas columns decide how it is shown, like this month, the same month last year, budget, and variance. Because rows and columns are separate, one row definition can feed several reports without rebuilding it.
That separation matters operationally. When the controller wants a budget comparison and the owner wants a prior-year comparison, you change the column definition, not the whole report.
Furthermore, with reliable reports, a team can spot gaps, decide where to put more resources, and show stakeholders the numbers behind a decision. For Canadian companies it also means cleaner records for the CRA and for year-end with your accountant.
Types of Financial Reports
Businesses can create various Business Central reports according to their requirements. For instance, you can create a report to understand their profit and loss in Dynamics BC by choosing the required dataset. To understand how their company has performed against the allocated budget, you can create another report.
Categorization of reports prevents you from hovering through the report to understand what data say about a specific requirement. Here are the different types of reports you can create in Business Central according to your requirements.
Income Statements
Dynamics Business Central includes revenue, cost of goods sold, gross profit, operating expenses, and net income. This empowers you to analyze revenues, expenses, and profits over a specific period.
Balance Sheets
This report helps you assess assets, liabilities, and equity, which enables you to display the financial position of a company at a specific point in time.
Trial Balance
Lists account balances with debits and credits. Most accountants ask for it first at year-end.
Cash Flow Statements
With this reporting type, you can analyze your operating, investing, and financing activities. This helps you understand the inflows and outflows of cash over a specific period.
Budget Reports
You can compare actual financial performance against budgeted figures, track financial performance, and identify variances.
Aged Accounts Receivable and Payable Reports
You can list invoices and bills, categorize them by age, and manage payments.
Key Features of Financial Reporting in Business Central
Financial reporting in Dynamics 365 Business Central aims to help businesses to present information that is correct, complete, and understandable. Here are the features that help you to achieve the goal:
1. Custom rows and columns
You define the structure yourself. Rows pull from G/L accounts, account ranges, or other rows. Columns can show periods, comparison periods, ledger entries, or budgets. You can also copy and edit definitions separately from the reports that use them.
2. Analysis by dimensions
Dimensions such as department, project, or region let you filter and group the same ledger data several ways. A Toronto head office and the Calgary branch can sit in one company file and still get separate results.
3. Account categories
Map G/L accounts to account categories and base your rows on them. Then a change to the chart of accounts does not break your reports, which is the usual reason reports go stale after a restructuring.
4. Sample reports to start from
Business Central includes sample financial reports. Treat them as templates, not finished reports. You still need to match them to your own chart of accounts, dimensions, and budgets, and outside the countries they were built for, you must map the row definitions before data appears.
5. Consolidation and Excel layouts
Business Central supports consolidation for groups with several companies, and Microsoft has added Excel report layouts for areas such as the consolidated trial balance. If your team works in Excel anyway, this removes a lot of copy and paste.
6. Budgets
Set up G/L budgets by period, dimension, and account, then compare the actual budget in the same report to track variances.
5 Ways to Generate Financial Reports in Dynamics 365 Business Central
There are multiple ways to create financial reports in Business Central. You can select any method as per your business requirements. Here, we are mentioning five methods to generate financial reports.
1. Using Account Schedules
Go to the account schedules setup page in Business Central Accounting.
Create rows for accounts or account groups and columns for periods, dimensions, or data types.
Add calculations, subtotals, and formatting to customize the report layout.
Save the schedule and run it to generate the report.
2. Using Financial Report Templates (In-built Report)
Utilize predefined templates available in Business Central for common financial reports, such as the income statement or balance sheet.
Customize these templates to fit your specific needs.
Select the relevant template, apply filters, and generate the report.
Export the report to Excel or PDF for further analysis or distribution.
2. Start from the sample financial reports.
Open a standard report such as the income statement or balance sheet.
Check the row definition against your chart of accounts. The samples will not match your setup automatically.
Copy and rename the definition before editing so the original stays available.
Print or export to Excel for review or distribution.
3. Using Dimensions
Define dimensions relevant, like departments, projects, and region to your business.
Assign dimensions to financial entries during data entry.
Use dimensions to filter and group data in financial reports.
Generate detailed financial reports based on dimension-specific data.
4. Using Budgets
Create budgets for different periods, dimensions, and accounts.
Input budgeted figures in Business Central.
Generate reports comparing actual financial performance against budgeted figures.
Identify and analyze variances to track financial performance.
5. Using Custom Reports and Extensions
Utilize the custom report design capabilities in Business Central.
Leverage the Business Central connector to integrate with other apps, like Power BI for advanced reporting.
Create custom reports, visualize data, and share insights with stakeholders.
Take Your Financial Reporting to Next Level with Power BI
Microsoft Dynamics 365 Business Central allows you to create financial reports, but it doesn't offer you advanced visualization and analytics capabilities. Hence, you can go for Power BI and Dynamics Business Central integration.
It helps you transform complex financial data into intuitive visual reports, which are easier to understand. With a wide range of visualizations such as bar charts, pie charts, and heat maps, you can get different perspectives on the data.
Also, the integration ensures your reports and dashboard always reflect your latest data. This helps you get timely insight and analyze them deeper to uncover trends, predict future performance, and take proactive action.
Here is how you can connect Business Central to Power BI to take your reporting to the next level:
Integrate Power BI and Business Central with the built-in Business Central connector.
Go to Power BI Desktop or service to create a report.
Select financial data to create a report.
Use visualization to understand your data better.
Publish the report to the Power BI service.
Share among your team for better collaboration.
Common Mistakes When Building Financial Reports
Using the sample reports as they are. They need to map to your chart of accounts and dimensions, or lines come out empty or wrong.
Hard-coding G/L account numbers in every row. When accounting restructures the chart, the reports break quietly. Even the best small business accounting software uses accounting categories to avoid this, so your reports stay accurate when the chart changes.
Skipping tax reconciliation. A report that looks right but does not tie to the GST/HST return will be challenged at filing time.
Letting everyone build their own version. Two people with two income statements means a meeting about which one is right. Agree on a small set of standard reports and who owns them.
Building before dimensions are agreed. Adding departments or regions after a year of postings means ledger entries without the data you now want.
Create an Accurate Financial Report with Dynamics Square.
Microsoft Dynamics 365 Business Central offers comprehensive financial reporting capabilities that can significantly enhance the financial management of your business. You can gain deep insights into your financial performance by leveraging its pre-defined reporting templates.
Creating financial reporting in Business Central helps you increase efficiency, better visibility, and scalability to support your business's growth. However, you need to ensure accuracy in your report to get a better outcome.
While creating a financial report, you might encounter challenges due to many reasons, like not having adequate expertise. In case of any challenges, look no further at Dynamics Square, a leading Microsoft Solution Partner in Ontario. We help with reporting design, tax area and GST/HST setup, Business Central implementation, and financial management.
We have served 350+ clients globally with their diverse requirements and helped them to utilize their investments in the best possible way. Our consultant is 24/7 available to you. Reach out to them to resolve your queries and get financial transparency.
Schedule a call to create financial report hassle free!
Frequently Asked Questions
Financial reporting is a detailed analysis of your company's financial data over a specific period, like quarterly or yearly. The report is classified into 4 categories, so you can leverage it according to your requirements.
a. Balance Sheet: Help you understand your company’s financial health at a particular time.
b. Profit and Loss Statement: Provides you with a clear picture of your company’s profitability in a specific period.
c. Cash Flow Statement: Help you understand the inflow and outflow of cash. Understand the future investment opportunity.
d. Statement of Changes in Equity: Empower you with the opening and closing balance of your equity, allowing you to understand your financial position.
To schedule a report in Business Central to run at a specific time and date, you can use the Next Run Date Formula field:
Click the Send to button.
Select Schedule
Enter the desired details, like the printer, date, and time.
Set the Next Run Date Formula field to D4.
Click OK to schedule the report.
To create a report in Microsoft Dynamics 365 Business Central, you can follow these steps:
a. Create a report object.
b. Design the dataset: The dataset determines what data is extracted or calculated from the Business Central database tables and used in the report. You can define the dataset directly in the AL code.
c. Design the visual layout: You can design the layout in Visual Studio Report Designer, Microsoft SQL Server Reporting Services Report Builder, Microsoft Word, or Microsoft Excel.
d. Make a report available for the user.
Financial Reporting. Microsoft renamed Account Schedules to Financial Reports in the 2022 release wave. 2. Account schedules are now row definitions, and column layouts are now column definitions.
