Finance & System Configuration – Brickyard/Amaco Working Session

Separate Company Setup for Brickyard

• Recommendation: Keep Brickyard as a distinct company inside Business Central (BC) rather than moving to QuickBooks or other external software.
  • Leverages existing BC licences and integrations (e.g.
  • Avalara sales-tax add-in
  • Consolidation functionality)
  • Enables seamless “company switch” for AP/AR users without extra data-migration or reconciliation work.
• No pressing objections from the team; consensus reached to remain in BC.

Recurring Journal Entries & Number Series

• Audit question revealed recurring journals are under-utilised and configured with the wrong series.
• Fix: change the field on the journal batch from “Number Series” ➜ “Posting Number Series.”
  • Allows users to enter a placeholder (e.g. “X”) and let BC assign the next sequential document number when posting.
  • Eliminates the common error: “You must use document no. _ (journal numbers out of order).”
• Impact
  • Removes manual renumbering when two users work simultaneously (e.g. Brie starts a JE then Chris posts).
  • Immediate, low-risk change; can be done today.

Deferrals & Prepaid Expense Automation

• BC supports Deferral Codes for:
  • Prepaid insurance (spread a 12-month invoice into $\tfrac{1}{12}$ per month).
  • Contractual expense schedules or deferred revenue (e.g. subscriptions).
• Requirements / caveats
  • System must allow posting 12 months forward (or to the end of the schedule).
  • Newer builds include a “Deferral-only Allow Posting Date” override—may not exist in current NAV version but is in BC.
• Creative uses: automatic allocation of lease payments, service contracts, etc.

Financial Cut-Off Controls

• Two levels of Allow Posting From / To dates must be aligned:
  1. General Ledger Setup (global default)
  2. User Setup (per-user override)
  • Recommendation: only accounting users should appear here so the override is purposeful and easier to update.
  • Since Amaco analyses results quarterly, consider opening multiple months, but keep control centralised.
• InsightWorks (warehouse/scanner) dependency
  • Some warehouse scanning roles require entries in User Setup.
  • Solution: retain ~10 scanner users + accounting; remove the rest to reduce monthly date-maintenance.
• Inventory Periods table
  • Amaco is using “Inventory Periods.”
  • Closing each period is the ultimate safety—prevents Adjust Cost from re-posting into closed periods. If left open, cost adjustments can spill into history.
  • Rule: BOTH a closed inventory period and closed posting dates are needed to freeze history.

Inventory Costing Issues

• Adjust Cost entries still drifting into prior periods → may indicate periods/dates left open (e.g. April not closed).
• When both controls above are tight, historical changes should stop; otherwise back to root-cause analysis.

Chart of Accounts (COA) Cleanup

• Team review results:
  • ~12 duplicate/obsolete accounts flagged to deactivate (not delete); rename description to “NOT USED – Available.”
  • Payroll liability accounts: consolidate state-specific GLs; detail tracked inside payroll software.
  • R&D account should evolve into a Department dimension rather than a standalone GL. Phased approach:
  1. Keep account for continuity with Alliant Group (R&D tax credit).
  2. Gradually migrate to departmental coding once stakeholders are comfortable.
• No major structural change needed; focus shifts to Dimensions & Financial Reports.

Financial Reporting in Business Central

• Account Schedules will provide rapid, drill-down financials without exporting Jet every time.
• Candidate reports (rec. 120):
  • Monthly IS vs. Prior Year Month
  • Trailing-4-Quarter IS (rolling)
  • Balance Sheet current vs. prior year
  • Cash-Flow summary
  • Departmental P&L
  • Margin by Customer / Product (once dimensions exist)
• Advantages
  • Instant run; drill into entries; export to Excel with templates (traffic lights, graphs, slicers, etc.).
  • Finance maintains schedules ≠ IT/Power-BI dependency.
• Next step: Chris selects which reports; Carrie will quote build time + Excel templates.

Dimensions: Current State & Expansion Plan

• Currently captured: Customer, Region, Business Group, Department – but not consistently enforced, rarely reported.
• Gaps: no dimension for Product / Item Group, “New Product” tracking, etc.
• Rules for useful dimensions
  • 2–6 core dimensions is practical (beyond that, reports become unreadable).
  • Each dimension must:
  • auto-default where possible (minimise manual entry)
  • be Code Mandatory where required so no blanks
  • map to at least one specific report or KPI.
• Proposed additions under discussion
  1. Product Category / Series (e.g. Glaze Series, Wheel model)
  2. New-Product Release Cohort (e.g. “Spring ’25,” “Fall ’25” dimension values) → enables profitability of launches.
  3. Potential “Brand” dimension once Brickyard, Brent West, etc. need roll-ups.
• Timing: define before Fresh-Start Migration to BC (golden opportunity; retrofitting later is hard).
• Worksheet meeting (Carrie + Chris + Shawn) to document dimension, values, default sources, required accounts, and target reports.

KPI & Ratio Framework

Profitability KPIs

• Sales Revenue
• Gross Margin $\text{GM\%} = \tfrac{\text{Sales} - \text{COGS}}{\text{Sales}} \times 100\%$
• Net Income
• Departmental contribution margins

Cash-Flow / Working-Capital KPIs

• Days Sales Outstanding $\text{DSO} = \tfrac{\text{A/R}}{\text{Credit Sales}} \times \text{Days}$
• Inventory Turns $\text{Turns} = \tfrac{\text{COGS}}{\text{Avg Inventory}}$
• Days Payable Outstanding (or A/P terms)

Optional / future

• Current Ratio $\tfrac{\text{Current Assets}}{\text{Current Liabilities}}$ (very strong today; may demotivate focus)
• ROA, ROE once budgeting & capital planning mature.

Implementation Notes

• High-level KPIs act as alert lights; deeper drill relies on departmental or product dimensions.
• Finance ensures any KPI/Power-BI build reconciles to the GL (prevents “mystery numbers”).

Budgeting Roadmap

• Organisation still at infancy stage; near-term goal is education on what budgets mean.
• Risks of poor budgeting:
  • “Hitting the number” behaviours overriding good business sense.
• Plan: phased adoption over 2–4 years; system capability exists but not urgent.
• Interim: can load high-level target figures to a few GLs or dimensions for variance tracking.

Power BI & External Reporting Governance (Rec. 125)

• Any non-GL tool (Power BI, Jet, Cosmos) must have finance sign-off to guarantee:
  • Data ties to GL & sub-ledgers (cash, AR, inventory valuation, etc.).
  • Consistent business logic (e.g. returns & allowances deducted from sales).
• Prevents multiple “versions of the truth.”

Performance Bottleneck – Inventory Valuation Report

Current NAV

• Wide-open valuation takes ~2–3 hrs (acceptable vs peers but still long).
• Tips
  • Run in chunks (per Location, Posting Group, or item-number ranges).
  • Open multiple NAV instances and launch each slice concurrently (licence permitting).
  • Schedule each slice via Job Queue for off-hours (Sunday midnight) → arrives completed Monday.

Future BC

• Fresh database = near-instant valuations.
• If performance degrades over years, options are:
  • Custom SQL report (on-prem) or Power BI inventory cube (SaaS).

Production Order Auto-Close

• Manual closing consumes significant time; 90 % of orders have no variances.
• Investigate Auto-finish / Auto-close parameter that other BC clients use.
  • Unknown exact setting in current NAV; could differ per department.
  • Constraint: Glaze dept leaves residual batch quantities; may prefer manual until process or UoM changes.
• If auto-close is global and irreversible, consider enabling after BC upgrade (can re-open orders there).

Action Items & Next Steps

1. Number Series Fix – swap journals to Posting Number Series (IT can do today).
2. Confirm Deferral module availability; pilot on annual insurance prepaids.
3. Shrink User Setup table to accounting + ~10 scanner users; update date fields monthly.
4. Close April inventory period; audit why Adjust Cost still back-dates.
5. Chris to select desired Account Schedule reports; Carrie to quote build + Excel templates.
6. Dimension workshop (Carrie, Chris, Shawn): draft dimension list, defaults, required GLs, reports.
7. Prepare KPI slide deck (profitability, working-capital) – link to GL; decide monthly vs quarterly cadence.
8. Inventory Valuation – create Job Queue batch slices and/or multi-instance run book.
9. Research Auto-Close production-order flag; prototype in test DB.
10. Schedule budgeting education session next week; outline risks & phased adoption.