Glossary of Dynamics 365 Finance & Operations Terms (for Users)
Users of Dynamics 365 Finance & Operations often have questions about the meanings of terms in the system.
We train our customers on Finance & Operations, and we know some of these words are peculiar. Below is our dictionary of the most commonly asked-about terms. At the bottom of this page, you’ll also find explainers for 6 pairs of terms that are often confused.
Note: Even though most customers, commentators, and consultants still call it Dynamics 365 Finance & Operations or D365FO, Microsoft now technically licenses it as Dynamics 365 Finance and Supply Chain Management.
Large groups of transactions that are processed “in batch.” These can be run at a specified frequency or schedule.
For example: nightly invoice processing would usually be a batch job, taking all eligible orders, generating the invoices, and sending them.
Item groups define how items are financially accounted for. In the item groups, you specify the accounts that transactions for the item post to.
Accounts could be sales, cost of goods delivered, cost of goods sold, cost of purchased materials received, inventory issued, etc.
Item model group in D365FO defines what degree of detail is posted for an item for each transaction.
For instance, do we need to keep track of how much of this product you have in inventory? If your receptionist buys a bunch of sticky notes, that will be an expense, but you don’t need to track your sticky-note inventory.
Any posted document in Dynamics is called a journal. (This can be counterintuitive for users accustomed to other accounting systems.) For instance, there are customer payment journals, packing slip journals, and general ledger journals.
Learn about trade agreement journals and the difference between transfer orders and transfer journals.
A legal entity is your business. Some D365FO implementations may have multiple legal entities, depending on how you want to report on your business.
Note: If you use different legal entities for different brands of products, you won’t be able to include them on a single sales order, for instance.
Load is how you sort picklists within a wave to organize the work effectively.
There are several options for configuring loads, and you should collaborate with your D365FO partner to determine the most efficient configurations for you.
A module contains all the functionality, data, configuration, and reports for a certain area in the system. Security roles define which modules each worker can access.
You can use organizations in Dynamics 365 Finance & Operations to represent such things as individual brands. At least one organization is required to use the system.
There can be multiple organizations within one legal entity.
A packing slip is the document your customer receives indicating what was in the shipment you sent them. It will contain an order number, items and quantities, etc. These are also referred to as delivery slips.
D365FO posts a digital copy of every packing slip, so you can verify any customer issues.
A picking list is the document your warehouse associate uses to determine what items should be put into a shipment to be sent to a customer or to transferred to another warehouse.
It is an internal document describing where the items are in the warehouse.
An item or service that is used on system transactions within a company, like sales orders, purchase orders, or production orders.
A product master is a type of product that has variants (for instance, different sizes of t-shirts).
A product master could be “Encore brand t-shirt.”
When you have multiple legal entities like distributors who can sell your products, you can use the “released product” functionality to control which legal entity is allowed to transact on that item.
Your released product can have different attributes than the product itself. In international sales, this can also be used to control packaging, etc.
Storage dimensions define how many levels of detail the D365 system will use for an item’s storage in inventory.
For instance, if you’re selling premium fishing equipment, all your expensive and fragile fishing poles may need to be tracked precisely by site, warehouse, and location. But a cheap and plentiful product like fishing line may only be tracked by site and warehouse (not location).
Tracking dimensions define how granularly an item itself will be tracked in subsequent transactions: by batch or serial number.
Batch numbers can be important later in case of recalls: can you track exactly which sales orders received the batch of product that needs to be recalled?
Serial numbers are especially important for situations like warrantees. Learn more about serialization.
Variants are the specific configurations or sizes of product that belong to a product master. For instance, the variants could be Encore branded t-shirts of sizes S, M, L, and XL.
This term is specific to warehousing. A pick wave is a collection of all the eligible orders to be shipped. You generally release waves of work to the warehouse (not just a single picking list at a time).
You may have a batch job to run a pick wave once per day. The warehouse manager will generally sort the picking lists in the wave and distribute assignments to staff.
A workflow allows you to control the posting of documents in the system that require approvals.
For instance, you could set a workflow to require approval by a manager whenever a new vendor is created.
A workspace is a pre-made collection of the most useful parts of a module for a given role at your company. You should engage your solution partner to design workspaces that fit your business processes.
Learn about creating workspaces.
Many of these terms are similar to what’s used in Dynamics AX. However, note that there are errors in the commonly copied Microsoft glossary for AX.
What Is the Difference Between Item Group and Item Model Group?
The main difference between item group and item model group is that item group controls “where” information gets posted to, and item model group says “what” information gets posted there.
For any item, the item group determines what accounts transactions for it are posted to. The item model group determines what information is posted in those accounts. There are also some batch options in Item Model Group.
Generally, you have far fewer item model groups than you do item groups.
What Is the Difference Between Module and Workspace in D365FO?
A module is the complete set of functionality for a system area, while a workspace is a curated set of functionality for a role.
A workspace contains the parts of a module that are helpful for doing a certain job in your company. Workers who do the same processes over and over again will benefit greatly from the simplicity of a workspace.
Workers such as customer service reps, who use many different aspects of a module to find the info they need, may find working directly in the module itself most efficient.
Note that a workspace can contain functionality from more than module, but your workers must have the correct security role for each module included in the workspace.
What Is the Difference Between Product and Released Product?
A released product in D365FO is simply the product as released to a certain legal entity, as in the case of a distributor. Released products can have different attributes than the product itself.
In other words, all businesses will have products, and some products in some businesses will have specific “released products.”
For instance, if you sell the same breakfast cereal in the USA and Mexico, you may have 1 product but 2 different released products (perhaps with different packaging) in your system, released to the different distributors in the 2 countries.
What Is the Difference Between Product Master and Released Product?
Similar to products & released products, a product master in Finance & Operations is a general type of product that can have many variants.
These are two different ways of organizing “families” of products in your system, and there is some overlap in their functionality.
Released products are completely independent of one another. The product master controls some of the attributes of the variants.
Many clients are drawn to the apparent simplicity of the product master + variant approach, but in practice the flexibility of product + released product is better for many situations and many companies.
Consult with a Finance & Operations partner to decide how best to configure families of products for your company.
What Is the Difference Between Organization and Legal Entity?
The main difference in the D365FO system between an organization and a legal entity is that different legal entities must be reported on separately, whereas organizations can be reported on together. In many cases, you’ll want to be able to report on multiple brands in a single report, which is why organizations are generally best for those.
Organizations in D365FO are very useful for individual brands, whereas legal entities are mostly useful in multi-company situations.
Now, for some businesses using D365FO, your system may be configured to use only one legal entity (company) and one organization (brand). In that case, the two may be functionally identical.
What Is the Difference Between Packing Slip and Picking List?
A packing slip is an external document for a customer, whereas a picking list is an internal document for a warehouse associate. In the normal process of shipping items to customers, there will be both a picking list (so your workers know which items to ship) and a packing slip (so your customer can see a printed statement of what they’ve received).
Where to Learn More
To learn more about the features and functions of Dynamics 365 Finance & Operations, you may be interested in our collection of D365FO tips and tricks articles.
To get detailed guidance and assistance for your unique D365 configuration and business needs, contact us.
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