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Dynamics 365 Business Central audit & optimization planning for a multi-entity private equity firm

Our customer relied on Dynamics 365 Business Central to support financial processes across its three legal entities, but the system was primarily used as a general ledger rather than a comprehensive financial management solution. To help the company derive maximum value from the Business Central platform, Itransition conducted a comprehensive solution audit and identified opportunities to optimize system configuration and expand its use. Based on these findings, we developed a prioritized plan for system improvement and offered a monthly support model to ensure seamless transition to new workflows and functionality.

3

companies’ processes evaluated

3

Business Central environments analyzed

2

weeks for end-to-end system audit

17

critical issues identified and prioritized for remediation

All technologies used

Microsoft Dynamics 365 Business Central

Engagement model

Full project outsourcing

About the customer

Our customer is a leading private equity firm that invests in businesses with steady, everyday demand, such as food, consumer goods, and essential services. The company’s portfolio includes businesses like food and snack brands, pet nutrition producers, technical services providers, and B2B software companies. Following a buy-and-build strategy, the customer helps portfolio businesses expand through both organic growth and strategic acquisitions, thereby maximizing returns for all stakeholders.

Industry

Financial services

Headquarters

New York, USA

Locations

USA, UK, Spain

Founded

2005

The challenge

Despite expanding its operations and adding new legal entities, the company continued to use Business Central for basic accounting tasks, with many of its built-in capabilities being either unconfigured or underutilized. Additionally, the financial team largely relied on manual processes and workarounds in their day-to-day operations, limiting Business Central’s effectiveness.

The customer faced the following issues:

  • Financial dimensions and analytical settings were inconsistently configured in the system across master and financial data, leaving most of the records uncategorized and limiting data analysis. Particularly, none of the 521 vendors had dimensions assigned, and only 5 out of 200 customers had the required analytical setup.
  • Financial Reporting and Analysis by Dimensions features were not enabled, so the financial team had to manually extract data and reconcile it outside the system to create management reports, which was time-consuming and error-prone.
  • Intercompany transactions were processed manually and intercompany balances were tracked based on dimension values assigned to the accounts, which created the risk of data inconsistencies.

The solution

At a glance

Itransition analyzed the client’s Dynamics 365 Business Central setup and identified technical issues, along with unconfigured and underutilized platform functionality. Based on the audit results, we developed a structured roadmap to enable the required features and improve system usage.

Itransition conducted an audit of three Dynamics 365 Business Central environments supporting the customer’s three entities, as well as over 21 installed extensions, including DocuWare, Pleo, Medius, and Solver. In the course of the assessment, we reviewed core Business Central functional areas, such as procurement, sales, accounting, treasury, reporting, and integrations.

Gaps assessment

During the business audit, our team identified problems affecting the finance team for months, such as month-end close requiring an estimated 20-25 hours of manual processing, manual intercompany balance tracking, and a broken currency feed. After documenting the issues, we ranked them based on their impact on the customer’s team productivity and data accuracy.

Business impact assessment

To help the customer prioritize the identified issues based on their business value, we evaluated the following factors:

  • Employee hours lost due to inefficient processes

  • Reports unavailable in the system

  • Manual workarounds used to bypass system limitations

  • Costs associated with posting errors

Intercompany process evaluation

The major audit finding was that the platform wasn’t set up to support intercompany accounting. We pinpointed the following Business Central gaps:

  • Standard Intercompany (IC) functionality wasn’t configured

  • IC Inbox and Outbox capabilities weren’t used, so transactions couldn’t flow automatically between companies

  • Account mapping between entities wasn’t enabled, so the same transaction could be posted to different accounts in each company

  • Each transaction had to be re-keyed manually in the receiving legal entity

  • Intercompany eliminations for consolidated reporting were prepared outside the system

We suggested implementing the IC functionality to improve data accuracy and the efficiency of transaction management between legal entities.

Additional automation opportunity

Itransition found out that the customer created monthly fund recharge invoices from scratch every billing cycle. To help them cut down on repetitive work, we identified the opportunity to automate the process with Business Central’s recurring sales lines functionality.

Financial process automation advisory

When analyzing financial processes within the customer’s Business Central environments, we revealed the following inefficiencies that impeded process automation:

  • Deferred expenses were posted and allocated across several accounting periods manually rather than through Business Central’s built-in functionality.

  • Although the bank account reconciliation capability was functional, the external reference number was nested deep inside the XML feed, preventing automated data matching.

  • Accruals were entered via general journals and the reversal functionality was not utilized, creating more manual work for the accounting team.

To help the customer address these issues, Itransition demonstrated how accounting management could be streamlined using standard Business Central features. These included RF/RV methods in the Recurring General Journal for accruals and deferred expense templates with straight-line methods. Additionally, our team proposed restructuring the XML feed to enable future automation.

During the review, our experts also discovered that exchange rates hadn’t updated automatically for over three weeks, an issue that went unnoticed due to a lack of configured alerts. We documented the underlying job queue errors and provided recommendations for remediating the issue.

Reporting & analytics enablement consulting

Itransition’s team discovered that Business Central’s Financial Reporting and Analysis by Dimensions capabilities were either not configured or only partially set up. Additionally, while the finance team used AP/AR aging reports, these relied on legacy report objects that Microsoft planned to deprecate. Based on the assessment, we concluded that the customer could switch to Business Central’s native reporting capabilities instead of relying on an external add-on.

Recommendations for long-term improvement

During the collaboration, we found that the financial team needed expert guidance on Business Central’s functionality to use the system more effectively. To help them understand the platform’s full capabilities, we suggested conducting 1-2 workshops per month over a four-month period. In addition, the customer needed assistance with fine-tuning existing functionality and implementing new capabilities beyond addressing the issues we had identified. Consequently, Itransition’s team proposed a monthly support model covering system customization, as well as user training and support, and provided the customer with clear visibility into future costs associated with stabilizing their current setup.

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The outcome

Itransition’s team evaluated the customer’s Business Central setup across three environments and provided targeted optimization recommendations to help the company:

01

Outline a roadmap for configuring the Intercompany capability and financial dimensions across 521 vendors, 200 customers, and the chart of accounts, automating financial processes, and enabling financial analysis and reporting within Business Central

02

Develop a review plan for aged AP/AR report objects against current Microsoft recommendations

03

Replace manual re-keying of intercompany transactions with automatic transaction flow through the IC Inbox and Outbox and enable in-system intercompany eliminations for consolidated reporting

04

Identify opportunities to reduce manual month-end processing from an estimated 20-25 hours to 10-12 hours or by about 50-55%