What Are Financial Dimensions?

Financial Dimensions in D365 Finance & Operations (F&O) help categorize financial transactions for reporting and analysis. They act as account segments in a Chart of Accounts and can be used for tracking expenses, revenue, and other financial data across the organization.

Types of Financial Dimensions

There are two types of financial dimensions:

1. Custom Dimensions
   • User-defined and maintained manually.
   • Shared across all legal entities.
   • Can have format masks to standardize values (e.g., CC-###).
2. Entity-Backed Dimensions
   • Derived from system-defined entities (e.g., Customers, Stores, Projects).
   • Values are automatically populated from the selected entity.
   • Some are shared across legal entities, while others are company-specific.

Setting Up Financial Dimensions

1. Create Financial Dimensions
   • Navigate to Financial dimensions in D365 F&O.
   • Select Custom Dimension or Entity-Backed Dimension in the “Use values from” field.
2. Activate Financial Dimensions
   • Dimensions must be activated before they can be used in account structures.
   • Once activated, they are available across transactions.
3. Assign Values to Dimensions
   • Use the Financial Dimension Values page to define attributes.
4. Override Dimensions for Specific Legal Entities
   • Some dimensions may only be valid for certain legal entities or periods.
   • You can specify validity under Legal Entity Overrides.

Financial Dimension Best Practices

✅ Use Entity-Backed Dimensions Where Possible – Reduces manual entry and improves consistency.
✅ Define Format Masks for Custom Dimensions – Helps enforce standardization.
✅ Use Financial Tags for Ad Hoc Reporting – Tags offer additional flexibility for temporary tracking.
✅ Leverage Derived Dimensions – Automatically populates related dimensions based on entered values.
✅ Understand Reporting Limitations – Some reports may not support financial dimensions out of the box.

Key Considerations

⚠️ Financial Dimensions vs. Legal Entities

• Financial dimensions can represent legal entities but do not replace them for operational processes (e.g., intercompany transactions, tax calculations).

⚠️ Deletion Restrictions

• Dimensions cannot be deleted if they are referenced in any transaction, account structure, or reporting setup.

⚠️ Performance Optimization

• Use the Financial Dimension Service to improve import performance for large journal entries.