Dynamics 365 2023 Wave 2 Release Highlights: ERP

Twice a year, Microsoft announces new features and updates across their Dynamics 365 platform. Here, our team have picked out some ERP highlights from the 2023 Wave 2 release, including the features across Dynamics 365 Finance, Business Central and more that we think are worth looking out for.

Dynamics 365 Finance

Core financials

This release focuses on process automation, helping teams work smarter with AI and enabling organisations to take action faster with planning, forecasting, analytics and insights.

The 2023 Wave 2 release focuses on:

• General availability of extended planning and analysis, which brings together operational and financial planning to continuously plan, act, and analyse.
• General availability of business performance analytics, which streamlines financial reporting by centralising data from multiple business processes and offering an easy-to-use interface.
• Further enhancements to invoice capture and AP automation with a new AP clerk workspace and support for the invoice journal.
• Enhancements to bank foreign currency revaluation, bank statement importing and bank statement management.
• Expanding country coverage to additional LATAM countries of Bolivia, Dominican Republic, Ecuador, Guatemala, Peru and Venezuela.
• Integration of Tax Calculation service with Project Operations and invoice registers, approvals and pools.
• Delivery of regulatory updates to comply with tax digitisation requirements including e-invoicing and SAF-T for Denmark, e-reporting for France, and e-invoicing for Australia, New Zealand and Spain.

Customer and vendor balance netting

Customers and vendors that are the same party now have the option to ‘net off’ balances against each other by configuration of a ‘netting agreement’. This process can be run manually or as part of a periodic task to complete the job automatically and helps to minimise the posting of additional unnecessary transactions.

Support more complex bank reconciliation matching rules

Users can now create more complex matching rules between multiple bank statement lines and multiple bank account transactions. Matching rules will now support the following scenarios:

• 1:N - One bank statement line matches with multiple bank transactions
• N:1 - Multiple bank statement lines match with one bank transaction
• M:N - Multiple bank statement lines match with multiple bank transactions

Import bank statements automatically

Bank statement files can now be shared to a SharePoint folder and a periodical batch job can be scheduled to upload the bank statement files.

Financial tags

The accounting distribution page will now support financial tags, the same financial tags defined and activated in prior releases for journals will be available. In future releases, financial tags can default from the documents that create accounting distributions and will be incorporated into more source documents such as free text invoices, purchase orders and vendor invoices.

Globalisation

In this release, out-of-the-box country coverage will be extended further with the addition of six LATAM countries. Microsoft continuously monitors legislation in all 57 out-of-the-box countries.

Dynamics 365 Supply Chain Management

The investments in this release wave focus on optimising and enhancing business processes, providing companies with the agility and resilience needed to navigate an increasingly complex business environment.

The 2023 Wave 2 release will focus on:

• The addition of compound charges, order classes and advanced order holds increases the agility of the sales process.
• New export control capabilities help companies manage compliance with export restrictions.
• Businesses with sales processes spanning Dynamics 365 Sales and Supply Chain Management benefit from these being expanded to include the management of prospects.
• A new, reimagined approval experience for purchase orders and purchase requisitions makes the approval process broadly accessible and increases the agility of the procurement process.
• Manufacturers that need to comply with multiple inventory accounting practices across multiple currencies continue to benefit from enhancements being made to the Global Inventory Accounting Add-in.
• Enhancements in material picking and handling last-minute manufacturing changes increase agility on the shop floor.
• Increased efficiency of warehouse operations is driven by the optimization and automation of key processes related to counting, customer returns, product receipts and the re-waving of orders.
• New interfaces and streamlined processes allow companies to deploy Dynamics 365 Supply Chain Management and use only the warehouse management capabilities, making these broadly available to companies using third-party ERP or order management systems.

Copilot and AI innovation

Make better purchasing decisions in procure-to-pay processes

Copilot provides a conversational user experience that helps purchasing agents make better purchasing decisions, such as after receiving new information or changes to purchase orders. It uses natural language to help users filter and organise the changes and suggests actions based on an analysis of their downstream impact. For example, it will identify which planned downstream sales, production or maintenance work orders won't be able to start as planned due to the changed delivery dates.

Inventory and logistics

Manage prices with the pricing management workspace

The pricing management workspace enables sales managers to review impending price rule status changes and lets them choose how to modify pricing policies. Sales managers can perform light tasks to enable or disable pricing rules without leaving the workspace.

Manufacturing and asset management

React to last-minute changes in production

Manufacturers often need to react to last-minute changes to production orders. These changes may occur due to updated items, updated routes, added margins or scheduling changes introduced to make better use of on-hand inventory. Thanks to this new release, Dynamics 365 Supply Chain Management now supports the flexibility needed to accommodate these kinds of changes.

Warehouse Management

Optimise the customer returns process

The customer returns process has been enhanced in this release, offering an improved experience for users. Returns can now be managed more efficiently, with users able to print their return labels automatically or on demand. When returned items arrive at the warehouse, workers can process them straight away using the Warehouse Management mobile app. These enhancements will save time and effort, making it easier for companies to manage customer returns, as well as boosting customer satisfaction.

Dynamics 365 Business Central

Copilot

Right now, Business Central already has some great AI features such as Late Payment Prediction, Cash Flow Forecasting, Stock Forecasting and the first feature of Microsoft Dynamics 365 Copilot which brought us Marketing Text Suggestions for your items. Business Central Wave 2 2023, brings us even more, including further Copilot productivity by allowing customers to complete Bank Reconciliations even quicker. This wave includes:

• AI-powered transaction matching – the AI smart matching feature improves automation and minimises the number of unmatched transactions that require user intervention and oversight.

• AI-generated explanations – automatically generated explanations that suggest how the unmatched transactions could be processed and matched, making it easier for the user by simply reviewing and approving the matchings.

Application

One of the best features coming in Wave 2 is the ability for international organisations, with legal entities across multiple localisations, to consolidate financials across multiple production environments as standard without the need for ISV solutions. This truly does make the off-the-shelf Business Central online solution a fantastic option for those companies.

Wave 2 also has a strong focus on supply chain, with a number of features designed to add efficiency, agility and accuracy to the way items are handled within the warehouse. Such as:

• Scan barcodes with the Business Central mobile app.
• Customers will be able to configure the proper level of warehouse handling independently for inbound, outbound and internal transaction flows.
• Suggestions for the most appropriate bin for items in basic warehouse configurations.
• Edit data for item journals and warehouse worksheets within Excel.
• Receive suggestions about orders that are ready for handling.

Granular admin rights

This wave brings a new role to Azure Active Directory (Azure AD), the Dynamics 365 Business Central Administrator. The new role allows for tighter control over the Business Central Admin Centre via delegated administrative access rights, letting you manage every aspect of all your Business Central environments. Administrators can now grant access to individual environments to users from specified partners, which makes it easier and simpler where multiple partners require access.

Dynamics 365 Human Resources

There’s been some great new functionality introduced for D365 Human Resources during this Wave 2 release, including:

• Improvement of recruiting experiences with functionally rich and intuitive experiences that target recruiters, candidates, and hiring managers.
• Expansion of the HCM ecosystem to include learning management system integration through public APIs leveraging Dataverse, along with expanding the payroll partner network.
• Building better together experiences that cross the Dynamics 365 space.

Access employee leave and absence in Teams for Dynamics 365 Human Resources (merged infrastructure)

Thanks to this infrastructure merge you can quickly and easily view time-off balances and submit leave requests right within Microsoft Teams. The Dynamics 365 Human Resources (merged infrastructure) takes the guesswork out of requesting leave. Employees can immediately access their leave balance and request information and managers can act on any leave requests needing their attention right from within Teams. The app is tightly integrated with Human Resources, so employees can also view the progress of their leave requests in real time.

Enable time and calendar integration with Project Operations

With the worker/bookable resource integration in place, it's critical for customers to have a single view of a resource's capacity. The second phase will integrate vacation, sick time and holidays into the calendar of the bookable resource in Universal Resource Scheduling.

Dynamics 365 Project Operations

In this Wave 2 release, Project Operations continues to invest in capabilities to improve usability, performance and scale across critical areas of the product, such as project planning, invoicing, time entry and core transaction processing flows. The main focuses include:

• Increased WBS task limits to 1000.
• Improvements in pricing for labour using cost-plus and contribution-margin-based models.
• Copy quotes, contracts and opportunities across legal entities.
• Improvements to project budgeting to support revenue forecasting and summarisation options when importing from estimates.
• Progress-based billing projects.
• Subcontracting to Purchase Order integration that will light up vendor retention and Pay-when-paid functionality.
• Support for prospects on quotes.
• Support for intercompany vendor invoices.
• Integration of Print management for billing schedules using ‘Post invoice automatically’.
• Improvements in usability and performance in specific areas across Project Operations.
• Investments in generative AI to help with core operational workflows like time and expense entry creation and submission.

Create budgets with summarisation during estimate import

With this new release, a project budget can now be created from estimates by importing the estimates into budget lines. When estimates are created at a granular level, like an estimate created for every resource associated with a task, the number of budget lines created makes it difficult to track costs at such a granular level.

Summarisation during import allows a recap of the estimate lines, for example, at a task level, where the quantity and amount of all time estimate lines associated with a task are summarised and budgeted against the task. This helps keep the number of budget lines at a manageable hierarchy, so tracking actuals against the budget lines is easier to manage.

Progress-based billing on fixed-price contracts

Microsoft Dynamics 365 Project Operations currently supports a milestone-based billing schedule so companies can invoice their customers at predetermined amounts and dates during the course of the project. However, a variation of this exists where a portion of the milestone is invoiced each period instead of the whole milestone. This feature enables project managers to split the value of the contract into a distinct schedule of values that are invoiced based on the progress of the work.

Increase WBS limits

This feature provides you with an enhanced capability to generate comprehensive work breakdown structures. It empowers you to create structures that are twice as extensive as the current limit, which allows you to have a significantly greater number of project tasks. This feature also expands the total number of resource assignments and dependencies that can be associated with each project, further enhancing the flexibility and complexity of project planning and management.

Copy quotes and contracts across legal entities

This is another great feature offering the capability to explicitly indicate and define the desired target legal entity, customer and business unit during the process of duplicating or replicating a quote or contract. With this functionality, the platform ensures you have complete control and flexibility in specifying the precise entities and units involved in the replication process, enhancing efficiency and accuracy in managing quotes and contracts within their respective contexts.

Support for intercompany vendor invoices in resource and non-stocked-based scenarios

Project Operations resource-based scenarios require support for intercompany vendor invoices. This handy new feature allows the accounts payable team to record the intercompany invoice received from the supplier. This is great for scenarios where a supplier provides services to more than one legal entity and creates one invoice as required by the terms and conditions.