Advanced Budget Planning in Dynamics 365 for Finance and Operations.

Posted by

In my previous post I explained about the basics of Budget planning with key elements and configurations. In this post, will discuss the advanced topics of budget planning with the business scenario.

**It is important to review my previous post for the better understanding of the topics discussed in this post.


Company ABC is preparing the Annual budget plan for its IT and Operations department. Budget manager or CFO plans the budget based on the criteria below,

  1. The Previous year expenses incurred for IT and operations department.
  2. CFO prepares the proposed budget plan with 10% increase on actual for each department and distributes to department level.
  3. Respective IT and Operations department managers reviews and finalize the budget at department level.
  4. CFO aggregates the budgets of both the department at the organization level.
  5. CFO review and approves the final budget plan.

Advanced Budget Planning_0000

Key Elements and Configuration:

Let’s now see how to automate the above business scenario with some key elements and configurations in Dynamics 365 for Finance and Operations.

Basic Budget Planning Configuration:

Below is some basic configuration required to cater the above the scenario,

Organization Hierarchy:

As explained in my previous post, organization hierarchy is important part of Budget planning configuration. From the scenario explained above, below Organization hierarchy has been created.

Organization Administration > Organization > Organization Hierarchy

Advanced Budget Planning_0.1.png

Budgeting Workflows:

Budgeting workflow uses the automated tasks to perform the allocations and stage transitions. Please refer to my previous post for more information on Budgeting workflows.

This workflow consists of “Budget planning stage allocation” task to perform the allocation and Stage Transition elements to automatically change the stages of Budget plan when action is performed by the user.

For this scenario, there will two Budgeting workflows, one for the Organization level to distribute and aggregate and budget and other for the Department level to review and finalize the departmental budgets

Budgeting > Setup > Budget Planning > Budgeting Workflows

Organization level Workflow:

Advanced Budget Planning_00

Department level Workflow:Advanced Budget Planning_000


Budget plan scenario Description Unit of measure class
Initial Initial – Previous Year Actual Monetary
Department requested Initial department budget request Monetary
Department approved Approved department budget request Monetary

Advanced Budget Planning_01


Budget planning stage Description
Aggregate Budget amounts aggregated from child budget plans
Approved Approved budget plan
CFO review Budget plan under CFO review
Department review Budget plan under department manager review
Distribute Budget plan amounts distributed from the parent budget plan
Initial Initial budget plan created
Submitted Budget plan submitted for CFO review

Advanced Budget Planning_02

Work flow stages:

As we have two different workflows to be defined for Organization level and department level, there will be two different workflow stages to perform the workflow tasks independently in different stages.

Budget planning workflow Workflow ID Stages
Demo – Allocation – Parent 000152 Initial
CFO review

Advanced Budget Planning_04

Budget planning workflow Workflow ID Require Parent Budget plan Stages
Demo – Allocation – Child 000153 Yes Distribute
Department review

Advanced Budget Planning_03


Name Budget plan scenario Column time period
Department Approved Department approved All
Department Requested Department requested All
Initial PYA Initial All

Advanced Budget Planning_0.2


Name Ledger dimension set Elements
Initial MA+BU+DEPT Initial PYA
CFO Review – Allocation MA+BU+DEPT Initial PYA
Department requested
Department approved
Department Request – Demo MA+BU+DEPT Department requested
Approved – Allocation MA+BU+DEPT Initial PYA
Department requested
Department approved

Advanced Budget Planning_0.3

Allocation Schedules:

Allocation schedule helps you to distribute, aggregate etc. from one budget plan scenario to another budget plan scenario. There are multiple allocation methods which can be used for allocations.

Considering the above scenario, I will discuss the Aggregate and Distribute functions on this post

Distribute: To distribute the Budget plan lines of the proposed plan from Organization level to the department level.

Advanced Budget Planning_0.6

Aggregate: To Aggregate the Budget plan lines from the department level to Organization level.

Advanced Budget Planning_0.7

Below are the Allocation schedules created to cater the above scenario,

Budgeting > Setup > Budget Planning > Budgeting Planning Configuration > Allocation Schedules

Allocation schedule Allocation method Source Scenario Destination Scenario Multiply by
Demo – Distribute Distribute Initial Department Requested 1.1
Demo – Aggregate requested Aggregate Department Requested Department Requested 0.00
Demo – Aggregate approved Aggregate Department Requested Department Approved 0.00

Advanced Budget Planning_0.8

Stage Allocation:

Stage allocations are used to automate the allocation process during the workflow processing. The budget planning workflow and stages will be associated with allocation schedules.

Budget planning workflow uses the Budgeting workflow automated task “Budget planning stage allocation” to automatically perform the allocation when the workflow reaches the specified stage.

Below are the stage allocations created to cater the above scenario,

Budgeting > Setup > Budget Planning > Budgeting Planning Configuration > Stage Allocation

Budget planning workflow Budget planning stage Allocation schedule
Demo – Allocation – Parent Initial Demo – Distribute
Demo – Allocation – Parent Aggregate Demo – Aggregate requested
Demo – Allocation – Parent Aggregate Demo – Aggregate approved

Advanced Budget Planning_0.9.png

Budget Planning Process:

This is the last step of the Budget planning configuration, please refer to my previous post for more information on Budget Planning process,

Budgeting > Setup > Budget Planning > Budgeting Planning Process

Budget Planning Process Administration:

Organization Hierarchy Responsibility center Responsibility center type Budget planning workflow Workflow ID
Demo-Budget Allocation Operations Department Demo – Allocation – Child 000153
IT Department Department Demo – Allocation – Child 000153
Budget Department Demo – Allocation – Parent 000152

Advanced Budget Planning_0.4Budget Planning Stage rules and Layouts:

Demo – Allocation – Parent:

Budget planning stage Associate budget plans Add lines Modify lines Layout
Initial Yes Yes Yes Initial
Aggregate No Yes Yes CFO Review – Allocation
CFO review No Yes Yes CFO Review – Allocation
Approved No No No Approved – Allocation

Demo – Allocation – Child:

Budget planning stage Associate budget plans Add lines Modify lines Layout
Distribute Yes Yes Yes Department Request – Demo
Department review Yes Yes Yes Department Request – Demo
Submitted No No No Department Request – Demo

Advanced Budget Planning_0.5

Creation of Budget plan:

Actual Entries:

Verify the previous year expense of account “600014”- Expenses

Main Account Business Unit Department Opening balance Debit Credit Closing balance
600014 003 023(Operations) 0.00 50,000.00 0.00 50,000.00
600014 004 025(IT) 0.00 60,000.00 0.00 60,000.00

Advanced Budget Planning_0.10

Create Initial Budget Plan from Previous Year Actuals:

Budgeting > Periodic > Generate budget plan from general ledger

  • Action: Create a new budget plan, Aggregated total by: Fiscal year
  • Then select the source data information,
  • Fiscal Year: 2016
  • From Period: Period 10(As per the period when actual transactions are posted)
  • To Period: Period 10(As per the period when actual transactions are posted)
  • Account type: Profit and loss (As per the account type used in the actual transaction)
  • Then select the target data information,
  • Budget Planning Process: “Opex– Demo Allocation”
  • Enter Budget plan name: Current Year Opex -2017
  • Budget Plan Scenario: Initial
  • Verify other information like Budget class, Responsibility center is automatically populated.
  • Click on Generate

Advanced Budget Planning_05

Budgeting > Budget Plans

Verify the Initial PYA column in the budget plan is updated with 50000 USD for Operations department and 60000 USD for IT department respectively.

Then Submit the workflow to distribute the Plan to respective departments.

Advanced Budget Planning_06

Verify the new child budget plans is automatically created for Operations and IT department.

Advanced Budget Planning_07

Initial Budget plan created for each department with 10% increase from the actual expense.

Respective department managers can review, edit and complete the Budget plan.

Advanced Budget Planning_08

Go back to the Parent budget plan and click on complete to aggregate the budget plans from department level.

Advanced Budget Planning_09

Verify the Department requested and Department approved columns are updated from the child plans.

Approve the Budget plan

Advanced Budget Planning_10

Verify the budget plan is approved.

**Approved budget plans can be further used to create budget register entries to manage and control the budgets in each department**

Advanced Budget Planning_11

Best Regards,



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s