Important updates to Dynamics 365 Finance & Supply Chain Management in the 2022 release wave 1

Microsoft Dynamics 365 Finance and Operations applications, comprised of Finance and Supply Chain Management, are powerful cloud-based enterprise resource planning (ERP) systems. Dynamics 365 Finance is a powerful financial management software that helps organizations manage global operations and simplify and automate financial processes while Dynamics 365 Supply Chain Management is an impressive tool to connect your operations, improve production performance, modernize your warehouse, and optimize asset management. Microsoft releases updates to these applications twice a year. Below is a summary of the important updates and new features from the 2022 release wave 1.

Vendor invoice OCR

Optical character recognition (OCR) is being increasingly used to import invoices into Dynamics 365 Finance. Microsoft will be releasing updates to OCR to address current limitations including incomplete functionalities, data inconsistency, and poor performance. These updates will be in public preview in September 2022 while general availability is planned during the 2022 release wave 2 release.

• Advanced configurations for OCR service – Microsoft will be implementing advanced configuration settings to OCR data processing to enhance flexibility to fulfill multiple business needs that customers have. Organizations will be able to configure settings to define minimal data required when creating vendor invoices, define the quality standard for invoice data, define rules to determine when a manual review is necessary, and more.
• Business rules in staging area – Planned for public preview in September 2022, this feature gives users more flexibility to validate invoices according to predefined rules that are optimized for their organization.
• Deployment wizard – With the deployment wizard, organizations will receive an out-of-the-box OCR solution for vendor invoice processing, greatly reducing the labor required for data entry. Additionally, this feature includes a step-by-step guide to seamlessly deploy the solution.
• Vendor invoice OCR hub – The OCR hub will be the central place for users to track and process vendor invoice data that was entered through OCR. Most invoice data will be processed automatically but users will also be able to review and edit invoices manually from the user interface.

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Validate vendor bank account

Previously, organizations could submit a vendor payment journal to the workflow even if the vendor’s bank account information was incorrect. In the Dynamics 365 Finance 2022 release wave 1, a new feature will allow organizations to identify issues with the vendor’s bank account before submitting a payment journal for that vendor to workflow. This feature will save time and enhance efficiency by empowering organizations to find and fix potential errors in advance

Subscription billing

Many organizations employ complex pricing and billing practices that can make managing them difficult. In the Dynamics 365 Finance 2022 release wave 1, Microsoft will implement features to give organizations greater control over billing per item and contract, making it possible to automate and evergreen renewals, enable flexible pricing modules, and enhance insights into recurring billing.

• Recurring contract billing – This feature enhances control and the management of pricing and billing parameters at the line-item level. Organizations will be able to set up contracts to have automated and evergreen renewals and the monthly recurring revenue report improves forecast accuracy. Flexible pricing and subscription billing can be based on consumption, meter readings, or usage. Additionally, with this feature, users can consolidate invoices if there are multiple billing schedules.
• Revenue allocation – Ensure compliance by accurately allocating revenue to items within contracts that have multiple performance obligations. Organizations can assign default and standalone selling prices and methods to items to calculate the standalone selling price as a percentage of related items.
• Revenue and expense deferrals – In the 2022 release wave 1, advanced revenue recognition features will be implemented to enable revenue recognition on document types beyond sales orders to allow for greater control of revenue. Additionally, organizations will be able to better manage deferrals at the line item. Templates can be predefined to create various types of deferral schedules such as monthly, quarterly, or schedules.

General ledger year-end enhancements

Microsoft is committed to continuing to improve on the year-end close process for Dynamics 365 Finance and Operations. In the 2022 release wave 1, Dynamics 365 Finance will receive several enhancements designed to improve performance during the year-end close process. Organizations will now be able to specify balance sheet financial dimensions in detail at year close. This functionality parallels the capability that is currently available for profit and loss accounts. Additionally, Microsoft has made many improvements to performance to ensure that the year-end close process runs more efficiently.

The following enhancements were added to Dynamics 365 Finance year-end close processes:

• The setup of the year-end closing templates was moved to a new setup page. Accounting managers will be able to initiate the year-end close from the new page and gain visibility with a list that indicates each of the times the year-end close has been run or reversed.
• A Reverse year-end close button will allow accounting managers to reverse a year-end close. This reversal will delete accounting entries for the previous year-end close and will not rerun the year-end close automatically.
• An enhanced history and audit trail will improve visibility into previously closed years by company and year.
• Voucher numbers will now be required when closing a year. In previous versions this was optional.

Globalization studio

Microsoft has evolved its Regulatory Configuration Services (RCS) to create the Globalization Studio for Dynamics 365 Finance. The Globalization Studio is the low-code tax compliance and globalization platform that enhances Microsoft’s compliance and globalization capabilities with out-of-the-box multi-country content. Additionally, the low-code globalization services and multi-country content will now be able to integrate with first- and third-party applications.

The Globalization Studio will be available in September as part of the 2022 release wave 1 and will include the following capabilities:

• Out-of-the-box tax compliance and globalization content for 44 countries and regions. This low-code multi-country content can be easily extended in the Globalization studio to meet specific requirements for more countries, regions, states, cities, industries, or verticals.
• Configuration and setup for tax calculation and electronic invoicing microservices
• Globalization content lifecycle management
• Low-code designer for globalization content including tax rules, e-invoice formats, regulatory tax audit files, and more

Inventory & Logistics

In the Dynamics 365 Supply Chain Management 2022 release wave 1, Microsoft has implemented several new inventory and logistics features to help organizations unlock visibility, resiliency, and efficiency in their supply chain.

• Global inventory accounting add-in – This add-in was in public preview in the 2021 release wave 2 and will be generally available as a part of the 2022 release wave 1. This add-in grants the ability to account for inventory in multiple representations by applying the appropriate valuation method and the selected accounting currency per instance. With this new functionality, organizations will be able to define as many costing ledgers as required. Inventory accounting in dual currencies and in dual valuations will be supported.
• Inventory visibility add-in – Available-to-promise (ATP) functionality has been added to the add-in to greatly increase fulfillment capability. It grants visibility into future stock levels and can check inventory for a specified day or ask for the next available dates for products. Additionally, inventory allocation functionality has been added to allow users to pre-allocate available inventory to ensure they can fulfill orders for key channels or accounts.
• Unified pricing service – Updates to the pricing service enable businesses to apply pricing and discount rule conditions and set scalable price attributes.
• Warehouse execution workloads – New out-of-the-box capabilities for running scale units as a part of distributed hybrid technology have been expanded. Warehouse execution workloads now provide support for inbound transfer orders, sorting for packing stations and inventory, integration with warehouse material handling automation, and additional warehouse features for manufacturing processes.

Manufacturing

Microsoft has added new capabilities in this release wave dedicated to completing the modernization of core manufacturing execution operations for improved usability and resilience.

• Microsoft has implemented a new, modern user experience for the production floor execution interface. Workers can easily use this interface to register material consumption, batch numbers, and serial numbers. Additionally, workers can instantly register material consumption for catch weight items and explicitly register the weight of each piece of consumed material.
• Enhancements to integrations between manufacturing and warehouse processes running on scale units enable autonomous end-to-end execution of production processes, from raw materials picking to finished goods put away.
• Continuous manufacturing and warehouse operations will be supported even when external connectivity is lost.

Planning

Microsoft has implemented many updates and new features to Planning Optimization processes. Planning optimization enables businesses to increase their agility so they can respond to volatile business environments. In this release wave, Planning Optimization has been significantly expanded to reduce replenishment time, reduce inventory levels, and increase resilience in response to disruptive changes in supply and demand. Order takers will have information right at their fingertips for complex, custom, make-to-order products. Manufacturers and retailers with products that have limited shelf life can leverage new features to help them optimize their supply planning.

​For users ready to start using the Dynamics 365 Finance and Operations new features from 2021 release wave 2, our team of experts is here to assist and recommend best practices. Contact Rand Group today to schedule a consultation.

Not yet utilizing Dynamics 365 Finance or Dynamics 365 Supply Chain Management at your company? Rand Group offers a 3-week pilot to visualize and evaluate either solution. We’ll set up a test environment using your organization’s data and processes allowing your team to explore key functionalities. At the end of the pilot, Rand Group will present the findings to key stakeholders on how the solution can transform your marketing, sales, and lead generation roadmap. Learn more about the Finance pilot here or the Supply Chain Management pilot here.