Budget Planning in Microsoft Dynamics AX 2012

Budget Planning in Microsoft Dynamics AX 2012 

Almost every organisation goes through the process of periodic budget planning as part of their normal business operations.  There is a wide range of third party applications available to facilitate the process of building and modelling an organisational budget.

Prior to Microsoft Dynamics AX 2012, Microsoft Forecaster was the recommended solution for customers running Microsoft Dynamics ERP.  Forecaster used precision budgeting components that consisted of Revenue, Expense, Human Resources and Capital.  When describing the precision components of building a budget model, these concepts were almost always in line with how most organisations built their internal organisational budgets.

Different industries have different requirements. While one industry comprises of organisations whose staff costs make up a major portion of their annual expense, another industry might face complex revenue streams. Using Forecaster meant integrating base financial accounts and dimensions with ERP systems as well as providing a means to report budget to actual results.

It was, however, not always a seamless tactic. One of the frustrations using this integration approach was that the financial hierarchies and reporting trees had to be re-created in Forecaster as well as Management Reporter.

Another issue was the integration with Microsoft Excel.  Excel is the #1 budget planning application used today by organisations.  Although Forecaster had strong functionality for budget modelling, its Excel integration capabilities were minimal at best.  Relying on Excel for budget planning was also prone to error.  Keeping track of multiple sheets and templates could become unmanageable, not to mention the difficulty to aggregate data across different workbooks.  The best practice was to maintain budget data in a central data repository to represent one version of the true budget.  Uploading the approved budget to the ERP system also allowed systems to validate against budget dollars in Procurement and Sourcing using budgetary controls.

As a result of these pain points, and the fact that Forecaster technology is fast becoming obsolete across the Microsoft Dynamics ERP offering, the Microsoft Dynamics AX Budget Planning module was introduced in AX 2012 R2. Budget planning is integrated to the core financial systems including the chart of accounts, financial dimensions, organisational hierarchies, and human resources as well as including budget to actual results.

The major design and integration points for Budget Planning are as follows:

Below is an overview of the phases to be considered as you are building your implementation.

Budget Planning will have some new features coming in AX 2012 R2 CU8 to be released later this year.  CU8 will include deeper integration with Worker Compensation in HR as well as more accurate date sensitivity when adding positions mid cycle.

Since every organisation needs to do budget planning, all Dynamics AX 2012 R2 or R3 customers should consider using budget planning as part of their initial or post go live implementation.

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