Financial Management, Simplified.

Dynamics 365 Business Central: Financial Management Overview

1. The General Ledger: Integrity & Reporting Standards

The General Ledger (GL) is the heartbeat of your financial operations. Business Central moves beyond simple transaction recording to provide a robust framework for statutory compliance and strategic analysis.

• Multi-Standard Reporting (UK GAAP vs. IFRS): Business Central handles complex reporting structures with ease. You can maintain multiple sets of books to satisfy local statutory requirements (UK GAAP) while simultaneously reporting to parent entities under IFRS. This is managed through robust multi-currency capabilities and dual-ledger reporting layers.
• Unlimited Dimensional Analysis: Move away from rigid, bloated Charts of Accounts. Use “Dimensions” to tag transactions with attributes—such as Cost Centre, Region, or Sales Channel. This allows you to slice and dice financial data for granular P&L analysis without restructuring your GL codes.
• Recurring Journals: Automate monthly accruals, prepayments, and repetitive allocations with saved templates to save time during month-end close.
• Auditability & Drill-Down: In an era of strict governance, traceability is non-negotiable. Every transaction maintains a tamper-proof audit trail. FDs can “drill down” from a high-level Balance Sheet figure directly to the original invoice or source document with a single click.

2. HMRC Compliance & Tax Management

Stay ahead of regulatory changes with a system designed for the complexities of the UK tax landscape.

• HMRC Making Tax Digital (MTD): Business Central is fully MTD-compliant out of the box. It establishes a digital link between your VAT return and HMRC, allowing you to submit returns directly from the system, ensuring you meet strict digital record-keeping requirements and avoid penalties.
• VAT Reverse Charge Handling: Whether you are in construction (CIS), telecommunications, or trading internationally, Business Central automates VAT Reverse Charge calculations. The system automatically accounts for the VAT on the supply, removing manual calculation errors and ensuring the correct boxes are populated on your VAT return.
• Duty Deferment Accounts: For businesses importing goods post-Brexit, managing cash flow regarding import VAT and custom duties is critical. You can configure Duty Deferment Accounts within the General Ledger to track liabilities and align them with your HMRC monthly statements, preventing cash flow shocks.

3. Treasury & Cash Flow Optimisation

Gain complete visibility over your liquidity and streamline your banking operations with UK-specific automation.

• BACS & Payment Automation: Streamline your accounts payable by generating standard BACS files directly from the Payment Journal. This allows for secure, bulk upload to your banking platform, reducing manual entry and the risk of fraud.
• Direct Debit Mandates: Manage customer collections more effectively by storing Direct Debit mandates against customer cards. This integrates with your cash receipt journals to automate the reconciliation of regular income streams.
• Bank Reconciliation: Automatically import bank statements (via Continia or Yavrio) and allow the system to auto-match transactions to your ledger entries.
• Intelligent Cash Forecasting: The Cash Flow Forecast module aggregates data from open Sales Orders, Purchase Orders, and tax liabilities. By utilising Cortana Intelligence (AI), the system analyses historical payment patterns to predict your actual liquidity position rather than just your theoretical one.
• Multi-Currency: Full support for automated exchange rate updates, unrealised and realised gain/loss calculations, and reporting in both local and additional reporting currencies.

4. Payables & Receivables (AP & AR)

Integrate your sales and purchasing functions directly with finance to reduce friction and accelerate the cash cycle.

Accounts Receivable (Sales):

• Outlook Integration (Order-to-Cash): Accelerate receivables by managing finance within Outlook. If a customer requests a copy invoice via email, your team can generate, review, and send the document without leaving their inbox.
• Sales Invoicing: Raise invoices for stock items or non-stock GL accounts (e.g., service charges, commissions).
• AI-Driven Late Payment Prediction: Reduce your Days Sales Outstanding (DSO). The system analyses customer payment behaviour to flag invoices at risk of late payment, allowing credit control teams to proactively chase debt before it becomes overdue.

Accounts Payable (Purchasing):

• Expense Management: Enter purchase invoices directly for non-stock expenses (utilities, rent) or match them against Purchase Orders.
• Purchase Invoice Automation: Capture non-stock expenses (utilities, rent) or match invoices against Purchase Orders seamlessly.
• Deferral Templates: Manage accruals effortlessly. Automatically spread purchase invoice lines (e.g., an annual insurance premium) across future periods to ensure accurate monthly P&L reporting.
• Vendor Management: Streamline payments with automated approval workflows (via Power Automate) and prioritise vendors based on discount dates.

5. Multi-Company & Global Operations

Designed for growing businesses, Business Central scales easily across borders.

• Inter-company Trading: Automate the flow of documents between related entities. A Sales Order raised in your UK manufacturing entity can automatically generate a corresponding Purchase Order in your distribution subsidiary, eliminating double-entry and reconciliation errors.
• Group Consolidation: Merge financial data from multiple business units into a single consolidation company. The system handles the heavy lifting of currency conversion and elimination entries, giving you a clear view of group performance.

6. Fixed Assets

Track your company assets accurately from acquisition to disposal, ensuring tax compliance and accurate valuation.

• Depreciation Management: Support for multiple depreciation books (e.g., one for Tax, one for Internal reporting) using various methods (Straight-line, Declining Balance, etc.).
• Asset Tracking: Track the physical location of assets. Maintenance costs and insurance details can be recorded against the specific asset card.
• Integration: Assets can be acquired directly via Purchase Invoices and disposed of via Sales Invoices, with the GL updating automatically.

7. Reporting & Business Intelligence

Turn data into actionable insights without relying on manual Excel exports.

• Account Schedules: Build custom financial reports (Balance Sheets, Cash Flows, EBITDA bridges) directly inside Business Central.
• Power BI: For high-level strategy, embed live Power BI dashboards into your Role Centre to monitor KPIs like cash balances and margin performance in real-time.
• Excel & Jet Reports: We know Finance teams love Excel. Business Central offers a native “Edit in Excel” feature for bulk adjustments and supports third-party tools like Jet Reports for advanced formatting and report distribution.