Methodology’s for Entering Opening
Balance for a newly created
company in Dynamics Navision
Introduction
The Customer has taken the decision to move from their current financial system to
Microsoft Dynamics Navision.
The planning phase has been completed; User acceptance testing has been signed off,
the data migration methodology has been tested and implemented and the new chart
of account, customer, vendors, fixed assets, bank accounts and posting groups have
all been created.
For auditing purposes of the new system, the financial values in the new financial
system must correspond with the original financial system, with every cent accounted
for.
There are many theories as to the best date and time to switch over. With proper
change management and user training, it should not matter, but generally the day after
the month end is signed off on the previous financial system which is normally
between the 5th and the 7th of the new financial month. The earlier this is done and
signed off, the more confident and comfortable the financial staff will be at the next
month end on the new system, especially if the balances match between the two
systems.
There are also various theories on creating opening balances in the new chart of
accounts. How entries will be created on the sub ledgers that will balance to the
previous financial system reports, the number of transactions created via Journals and
if balances are created per month or a total balance at date of cut over.
If the original no. series is used, the balancing process is simplified and the user
acceptance of the new financial system is easier.
Some of these theories / options are:

Importing the total trial balance;
o Import all sub-ledger entries directly to the correct control account.

(preferred option) Import the trial balance and post all sub-ledger balance for
(vendor, customer, fixed asset, bank and stock) to the take-on account
(999999);
o Import all sub-ledger entries to the take-on account (999999) with the
correct control account as the balancing account.
This is a new system that the customers are moving over to, so most of the time the
original chart of accounts is simplified in the new financial system and the use of
dimensions on transactions reduce the use of analysis information directly on the
chart of accounts, by adding account no’s. One account can be used for many
transactions with different “cost centres / dimensions”.
There are unused customers and vendors that need to be removed, so it is likely that
most of the numbers will change in the new system, this must be properly conveyed
by management to the financial users with easily accessible lookups for the original
no’s. This document is intended to inform the customer, so a decision can be made on
the best methods for creating opening balances in the new system
Reports
The following reports are basic financial reports that should be printed from the
previous financial system;
 The reports are to be printed up to and including the last day of the month end in
the previous system, which will be taken on as the opening balances in the new
System.
Note: These reports are to be signed off by the financial manager and director, It is
advisable that the report is reviewed and signed off by financial auditors, (which will
simplify the next financial audit)

Trial balance (including balance sheet and income statement items).

Detailed customer ageing.

Detailed vendor ageing.

Detailed fixed asset book value by class and subclass.

Bank trail balance.

Bank reconciliation for each bank account.

Warehouse physical inventory List.
A similar report will be printed from the new system. This will balance to the
previous system and be signed off once the process is complete.
Chart of Accounts
The new chart of accounts should be a simple but accurate representation of the
customer’s business and should resemble the income statement and balance sheet as
close as possible. This will make the detailed account reporting (account schedules)
simpler, (keep in mind that the transactions should have dimensions that are easily
reported on, so the number of accounts can significantly be reduced if the dimensions
are used properly)
 Microsoft Dynamics Navision has the option to sub-total sets of accounts called
“begin and end totalling”. These end totals should be mapped back to the profit
and loss reporting.
 Income and balance sheet reports simplify the setups of the account schedules. It
will also increase the readability of the chart of accounts.
 If begin and end totalling is used, the posting account will make up a totalling
account which can also be indented to make the chart of accounts more readable.
 If an account is used as a sub-ledger account (debtors control, creditors control,
bank, fixed asset and Inventory), the option to post directly to the account via a
Journal or document should be removed.
 If transactions are going to be processed to a GL account, it should be setup with
default posting groups, that will point to the default VAT accounts, which then
gets posted to the account based on a sale or a purchase
 Each account can be setup with a set of required dimensions. If setup, no
transaction or journal can be posted to the GL account without a dimension.
Note: It is critical that the required dimensions are setup correctly prior to
processing, to avoid entries with no or incorrect dimensions.
 When importing data into Navision, the mapping of accounts can be done before
importing the file or by creating temp importing mapping tables.

Import the mapping into a mapping table where the old account no is
stored with a related new account no., all old account no’s must have a
new account no., the new account no. can appear many times in the
mapping table but the old account no. should only appear once in the
mapping table.

Or the mapping of the old account no to the new account no is done in
excel and the GL balance created on the new account no in the take-on
journal.

A mapping table can also be used to map “cost centres / dimensions” from
the previous system to new dimension in the new system. This might have
to be a manual process of analysing each account and allocating the
balance or a portion of the balance to a new dimension.

Or the mapping can again be done in Excel the map the old “cost centres /
dimensions” to a new dimension and the new dimension is used on the
take-on journal.
Note: It is not recommended to import historic transactional data in the new chart of
accounts, as the historic data must still be available on the previous system.
 The total of the take-on journal posted into Navision must total to zero (0),
otherwise the trial balance will not balance.
 If the financial year starts on the 1st July, we can use the posting date 30/06/06C
(the "C" at the end is important as it is stating a "Closing" Date) this is
comparable to a "13th Month" in other accounting systems.
 If the customer have not closed their income statement in the previous system, we
can use the standard date 30/06/06 and run a year end in Navision.
Note: This is a highly likely scenario, as the customer might want to wait for the
audit result before processing a year end in Navision. We can run a year end at
any time and re-run it as and when needed.
 If the take-on happens a couple of month after the year end a balance for each
month can be take-on which will allow you to run a full year’s financial reports
from the new system, otherwise the total balance for each account is take-on and
financial report can only be run from the new system from that point / date
onwards.
Note: It is advised to take-on a balance for each month after year end until the month
of go-live so a full set of financial report can be printed from the new system for every
month after year end.
 There are various options when doing the actual balance takes on in Navision.
This is the recommended option:
Import all Accounts from the trail balance, balances for accounts (warehouse
/ stock, customer, vendor, fixed asset and bank accounts) linked to a subledger must be imported to a take-on account

The Trial balance cannot be printed until the opening balance has been
imported. This is done by importing the transactions from warehouse,
customer, vendor, fixed asset and bank accounts.

A new GL account will be created where the balances for the various subledgers are posted.

Opening balances are then posted against the new accounts and the various
control accounts.
Note: The same would apply to all number s that are changed (chart of account,
vendor, Item no’s, etc.).
Customer / Vendor
New customer / Vendor no’s can be used, (the customer details can be cleaned and
update) normally only customers with activity for a certain period or with outstanding
payments are loaded into the new system.
Note: Using new customer / Vendor numbers must be communicated to the financial
staff and any user that might have reporting requirements from the new system.
Customers who have been using the same number for many years take time to adjust
to new numbers.
 The same applies with mapping customer / vendor and the GL accounts. Mapping
of accounts can be done prior to the file import or by creating temp importing
mapping tables. Mappings might also have to be done for the following:

County codes;

Postal Codes;

Payment Terms;
 Some data might not exist on the current data and will have to be provided before
importing:

Gen. Business posting group;

Vat Bus. posting group;

Customer posting group (Sub-ledger/debtors control);

Vendor posting group (Sub-ledger / creditors control);
 Customer open invoices (transactions) or balances can be imported.
Note: It is strongly advised not to import all transaction history and only open
documents not paid as yet by the customer.
 Open and partial processed orders must be created or imported in a different
process as they do not affect the actual balance take-on described in this
document, it is recommended to recreate the documents manually as part of
training, and to process as many open order before the go-live cut over.
Import all open transaction for the sub-ledger to the take-on account and the
balancing account must be the control account linked to Customers /
Vendors

Create or use a temp GL account

Import all open invoices (transactions) to the new / temp GL account that was
created when the trial balance was imported.

Balance the journal to the debtors / creditors control accounts of the previous
system.

The total of the previous system customer ageing and the new system ageing
must balance and it must balance to the customer control accounts
Note: If they do not match it could be because it was imported incorrectly or
it never balanced in the previous financial system.

Print a customer ageing and vendor ageing after the journals have been posted.
This must balance to the previous systems ageing reports and if they balance,
sign off can take place.

If the original Document dates were posted, the ageing should balance to the
previous systems ageing.

There could be a variance in the ageing, only based on how the ageing is
calculated in the systems. (Based on 30 day per month or the actual number of
days per month).
Note: Check balances in Excel before importing and again before posting.
Fixed assets
 Import the fixed assets and import the fixed asset depreciation book for each fixed
asset. This can be achieved with a single data port.
 Import book values for each fixed asset into a FA journal or fixed asset GL
journal. Depending on the option used, this can all still be achieved with a single
data port. In this case the fixed asset GL journal.
 Each fixed asset must be provided with the following information before
importing:

Class code;

Sub-class code;

FA posting group;
Import all open transaction for the sub-ledger to the take-on account and the
balancing account must be the control accounts linked to fixed assets

Book value entries is posted with the fixed asset GL Journal and integrated
with the GL, which means the entries are created for the fixed asset
acquisition and the fixed asset total depreciation for every fixed asset on the
general journal, depending on the number of fixed assets.

GL entries will be posted to the new account that is created when importing
the trial balance and the fixed asset acquisition and total depreciation accounts
to balance out the original trail balance entries that must be posted to the new
temp account
Bank Accounts
 Create Bank Accounts and setup the new posting groups for each account, this can
be done manually, depending on the volume of accounts, normally there would
only be a couple of bank accounts.
 Once the open items (un-reconciled items / cheques) for each bank account are
posted, an entry for each bank account must be posted to balance to the bank
statement.
Import all open transaction for the sub-ledger to the take-on account and the
balancing account must be the control accounts linked to bank accounts

Import all open transaction from the bank into a new journal to the Bank and
the balancing account will be the temp / new account no used when importing
the trial balance.

The difference between the open items and the balance of the GL account no
should be the balance of the account.

Create a journal for the balance of the account as well.

Print the bank detail trial balance and confirm that the GL account for the
bank is balancing to the bank sub ledger.
Warehouse Items
 The same applies with mapping item as it does for a customer. Mapping of
accounts can be done prior to the file import or by creating temp importing
mapping tables. Mappings might also have to be done for the following:

Location code
 Some data might not exist on the current data and will have to be provided before
importing:

Gen. Business posting group

Vat Bus. posting group

Inventory posting group (link from the Sub-ledger to the GL)
Import all open transaction for the sub-ledger to the take-on account and the
balancing account must be the control accounts linked to warehouse / stock

The last step would be to create an "Item Journal" with "Positive Adjustments"
according to the warehouse list from the old system.
Note: Don't forget to enter exact "Unit Cost" per item to make sure the balance sheet
in the old and new system matches.
Note: All imports can be done by loading the journals manually instead of importing
them. It does not matter which options are used, but the reports printed from the
previous system must balance to the report printed from the new system and they must
be signed of and filed a proof of balancing.

Comments:
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