Setup opening balance entries for Microsoft Dynamics 365 without using dummy account 9999Sep 16, 2020
Are you a Microsoft Dynamics 365 consultant importing opening balances using "9999" accounts? I understand you may have worked with other ERP or Accounting systems where you have had no choice but to use "9999" accounts. Perhaps another D365 consultant told you this was the only way to establish opening balances in D365. It really doesn't matter how you got here, just know there is a better way!
When importing opening balances, instead of using these fake numbers as offset, use the associated Control Account for that entity.
For example, importing open invoices to establish AR balances in D365, the entry would look like this:
Entry to setup subsidiary ledger:
Account Type = Customer
Account = [Customer's Account number]
Debit = Invoice Amount
Offset Account Type = Ledger
Offset Account = [ AR Control Account defined in your posting profile]
The resulting entry to General Ledger:
DEBIT: AR Control Account = Invoice Amount
CREDIT: AR Control Account = Invoice Amount
Yes! The net change to GL is zero, nil, nothing!
The GL upload posts the AR amount.
I've been spreading this good news for decades now, however in recent times I've seen the practice of using "9999" creeping in again. So, let’s spread the good news and stamp out "9999" in Dynamics D365.
You might ask, wouldn't I need 9999 for visibility? to know when the balance is zero?
How about making sure subledger and GL agrees BEFORE uploading to D365?
When the client is validating balances in the legacy system, they must ensure the AR Aging agrees with the AR Balance Sheet account. If they can't before cutover, move the difference from your AR GL account. The client's accountant should determine whether to write off or move to a new account. This becomes an accounting task.
Isn't it important to maintain the integrity of D365 and not taint with issues from legacy system?
When using "9999" isn't it tedious to remember to keep track of these "9999" and reclass every time you make adjustment or reversal to posted opening transactions? That's not an issue using the Balance Sheet account as offset. The only drawback I can readily recall, is the unlocking and locking of these control accounts.
This article was originally posted on LinkedIn, September 2020. It's added here for visibility and posterity. To see original post and comments, click this link.