Overview:
Finance have tp deal with monthly, quarterly or yearly general journals such as insurance entries, rental, lease, Loan Interest Accruals, …
Some allocations of Shared Service Cost Allocation, Allocating HR or IT costs across departments, Distributing marketing costs across product lines, Allocating rent, utilities, and maintenance across cost centers.
For long time Finance has mostly used period journals or general journal allocation functionalities. Both of these two present significant limitations and require continued manual work.
Periodic journals do not post automatically. You must manually generate and post them each period. ou cannot post directly to future periods unless those periods are:
- Open in the fiscal calendar
- Configured correctly in the journal setup
Periodic journal do no present any Integration with Subledger Modules
While FL allocations only works works with Posted Transactions. Ledger allocations affect only the general ledger. Allocations are not real-time. You must run the allocation process manually or schedule it via batch jobs.
Hence the ointroduction of subscription module introcuded by Microsoft in (bought from binary stream
Subscription billing:
Microsoft introduced the Subscription Billing module in Dynamics 365 Finance as a replacement for the older Revenue Recognition module in 2023. This shift was part of a broader move to support modern, recurring revenue models and improve compliance with standards like IFRS 15 and ASC 606.
The latter module includes:
- Recurring Contract Billing: Automates periodic billing cycles, supports various pricing models (fixed, usage-based, tiered, hybrid), and manages contract renewals and modifications.
- Revenue and Expense Deferrals: Automates the deferral and amortization of revenue and expenses based on contract terms, providing real-time insights into monthly recurring revenue.
- Multiple Element Revenue Allocation: Ensures compliance with accounting standards (ASC 606 and IFRS 15) by handling complex pricing and revenue allocation across multiple items
A Step-by-Step Guide
Setup of Deferral schedule template
The module on d365 fo allows to setup deferral templates see screen capture below
Setup of Deferral defaults
Setup the subscription billing Parameters:
Example
Create the main entry such insurance: Debit your prepaid account and credit you payable account.
Click on dfferal and you wil see the schedule you setup
All deferral schedules
You can then click on preview to see the posting date and the amount to be boocked in each period
After posting, a deferral schedule will be created
Schedule lines:
Use the Recognication batch processing
Setup the right frequence for the Recognition batch processing
