I have read lot of queries and questions related to opening balance migration. The general questions are:
1. On which date should we post opening balance?
2. Do we need to run the closing process after opening balance is imported?
3. How opening inventory is posted and tallied to balance sheet?
The above mentioned questions are only few. There are many others which i have seen in sites like dynamics community and dynamicsuser.net.
I will try to answer the questions written above and also some important tips which should be helpful.
Data migration and specially opening balance migration is one of the most important process and should be planned carefully. The plan should be data analysis, cut off date of data, journal names and other things depending on the industry and volume of data.
I will be mainly focusing on the opening balance migration.
Opening Balance Migration
We can go-live only when opening balance is migrated, posted and validated successfully. There are some factors which we need to consider before we start importing and posting data. Following are steps which are normally followed:
Thumb Rule: Remember to take the DB backup at every stage.
1. On what date are we migrating the balance: This is a customer based decision and project plan. Let’s take an example where the Go-Live date is 1st Jan. In this case we have two options again. One is either we post on 31 December of the last year on we can post on 1 Jan. Again here also we need to decide as we can post on either of date.
Avoid middle of the month as it’s really difficult to get the balances and otherwise you will be required to post backdated transactions also.
2. Accounts whose balance needs to be posted: Every company is different from another and hence requirement changes. We need to understand the client’s business, look at their financial transactions and then we can decide the financial data migration. For example, inventory is very common in trading and manufacturing industries but not in service industries. Hence we need to finalize the financial data first.
3. Financial data to be posted: After data analysis, we need to figure out the balances which we need to post. For example, we first post inventory and then ledger and sub-ledger balances. Inventory is posted warehouse wise separately. Similarly we create separate journal for AP, AR, GL. Here also, try to create different journals again. If project is being used, it is suggested to post on the project transactions directly. Remember all sub-ledgers are different from other.
4. Inventory data to be posted: Movement journal is used for this. Create separate movement journal for all the warehouses.
5. Should we run closing after Opening upload: This totally depends on the opening balance migration date and the approach which is suitable for client. Closing can only be run if we are starting AX on the first day of financial year. Assume that the fiscal of client’s starts from 1 Jan and on the same date they are going live. In this case we can migrate the opening balance on 31 Dec, run the inventory closing (if applicable) and then fiscal closing.
If the start day is in between of financial year then we can’t run the fiscal close. We can post the opening balances and start the operation.
6. Opening balance journal name: The best process is to create a dedicated opening balance journal with a separate voucher series. Some company wants it. You can propose this to client.
7. Validation of data posted: Lastly, when the data is migrated, post the data one by one and get it validated. Take the backup frequently. Remember that opening balance is successfully migrated when trial balance matches of AX to legacy system.
The 999999 Account
I guess account 999999 is most commonly used account for opening balance migration. Let me explain you why we use this account.
When we get the opening balance, the balances are in Debit side and Credit side. The sum of Debit and Credit will always be 0. This is as per double entry book keeping. You will never get balance where debit balance is different from that of credit.
Another point, when you get the balance from client, look closely at the account type and balance. Asset accounts has Debit balance and Liability has Credit balance. So when we migrate Asset balance, like FA, Bank, AR, Inventory.. we offset it to 999999 account.
Now when we migrate Liability balances like AP, Loans, Accumulated Depr, Equity.. we again offset it to 999999.
This way, when our migration is complete then the net balance in 999999 will be 0. 999999 having 0 balances gives message that the debit and credit balances are equal, however it doesn’t guarantee that.
Anyway, once the balances is migrated, suspend this account for any future transactions.
we actually use 999999 to balance the debits and credits.
Apart from the discussion above, i am also attaching certain links of prominent AX knowledge base sites and these are worth looking at.
Further if you have any doubts/issues or scenario, please reply here. Let’s discuss it and come to a solution.
Opening balance migration is an endless topic. Please let me know if this post needs any editing or update.
Your comments and suggestions are most welcomed.
Very soon i will come up with fiscal year close in AX.
Let’s share knowledge