Concise Guidelines for MAX ERP and Dynamics GP Multi-Company

Concise Guidelines for MAX and Dynamics GP Multi-Company

Packaged software utilization is driven by the organizational structure. Software and computerization allows for speed of communication across the organizations landscape and provides information, control, security and predictability through analytic techniques. Thus, to model software usage that increases production, service and efficiency, it is required to have business structure modeled first. Next, one can gather all the requirements and assess the existing software capabilities and compare it with the ideal scene. Within the framework of the MAX Suite of applications we have connections to both Dynamics GP and Quickbooks. This article is concerned with the determining factors of why and when one would either create multiple companies in MAX or in Dynamics. It discusses some options to assist you in making a correct as possible decision that can provide a greater workability across the enterprise. And helps determine the costing implications surrounding the decision.

A key importance is your understanding of how MAX works and handles costs. If you haven’t studied costing or know what is available to you in the software, then attending a class or course will allow you better wherewithal to make correct decisions.

Here is a brief outline of the key functions available to you in MAX.

MAX Costing Method contains three methods, Standard (recommended), which is normally selected has the highest level of cost control, cost integrity, and financial stability. Standard costing values inventory based on the current standard and records variances to monitor change. This gives the business a way to compare. MAX provides unlimited Cost Sets to record costing standards over time or to simulate cost changes from other Costing Methods – Average and Last Purchase Price. Most users change standard costs and revalue inventory monthly or even yearly but there are cases that warranty even period to control standards. The common variance analysis transactions include purchase price, planned and actual shop order values and breaks out material, labor and material and labor overhead variances. All these variances have transactions associated with them.

MAX also provides a weighted average costing and a last purchase price method. MAX allows real-time updates to alternate cost sets to provide even further insight into costs using those methods and revaluations can include simulations and analysis of all of these in the Costing options.

MAX contains a GL Account Table. This table is mapped to every transaction, stockroom. There are override code to send transaction values to alternate accounts. Such might be the case most commonly for Non-Inventory expenses and cost or R&D categories to track purchase receipt during development and prototyping. MAX uses default codes such as CSTOFSLS, ACCTPAY, PPV etc. (Ref. FIM Documentation). These are hard coded in MAX and the user assigns a GL Account Number. This same GL account number is entered in Dynamics GP or qb; likewise, all the stockrooms and overrides. To add dimension to the structure MAX allows for multiple Charts of Accounts by another key in the GL called Account Type Code. By assigning this account type code to the individual Part MAX can separate Product lines or any category of Part or transaction. A common use is to separate Finished Goods and Raw Materials. But one might also separate logically different internal manufacturing functions.

The next dimension is the ability to create multiple companies in MAX that are separate entities entirely. Being that these companies can be contained within the same or even different instances of the database provides great flexibility in creating distributed environments spanning national and international designs. Also, with current technologies and private cloud you can easily create a distributed environment that yields the flexibility to you need.

In addition to knowing the above it is very important to first do a complete evaluation and to consider some important points.

Accounting Setup

The first and most important is how accounting is actual going to be working for the entities. Are there separation FEIN number (Federal Tax ID Numbers)? Do you need a separation in the key reports as the balance sheet.

Master Data

Master data are your Parts, BOMs, Customers, Vendors, Pricing Structures, Miscellaneous Items, Code Data and Currency information, Bank Accounts. Is it important that related transactions are separate? It maybe that each entity transacts completely separately from each other but use the same vendor or customer. What if each entity purchases from the same vendor or sell to the same customer? Depending on how you are doing business you may have a compelling case for either. The other major factor is inventory. It can become complicated to try to track inventory for separate entities within the same instance of MAX. Using a stock ID alone and when you have common parts and keeping these separate becomes a challenge. So, if inventory separation is needed then it is wise to create a separate company.

Workflow and Information Flow, Security Considerations

As state in the first paragraphs the business structure – the workflow, flow of information – is paramount when deciding how to structure your information systems. The next layer from that stand point is what security is necessary. There are very many factors to discuss on security these days with the software username and password being only one. Hence a review with IT on security, physical placement of information systems, policies and security education and all important. With that you’d need to the factors of security for the companies and know if security separation for the entities and companies are required. If users should only be allowed access to a single company then a separate MAX and separate Dynamics company is recommended. Keep in mind one need to see how the flow of information is working and if the separation causes more trouble than it is worth in a multi-company scenario then the best choice might be to have them remain in the same company with a logical costing separation using segmented accounts and account type codes.

Tools and Integrated Software

If you are using external tools such as software from Balance Point Technologies, 3rd party add-ons to Dynamics GP, MAX Dashboards, Excel Analytics or any other attached software and tools you’ll need to identify these integrations within the scope of a multi-company scenario. Some tools may be needed in one entity and not the other or you may need to configure and use these tools in all locations. Networking issues and infrastructure is important, licensing is important, Engineering systems and Document management systems and any other software tools must be included when review and designing the systems.

In summary, the overall goal is to design information systems that facilitate the purpose of the organization. In that light you can recognize that you are laying the foundation for an expandable foundation with a potential channel of information flow to service the business into the future. It starts with really know how the organization is working, what its design is or is going to be, and what company, entity design is most desirable to support it.

Vincent Stefanetti

About Vincent Stefanetti

Vincent Stefanetti Senior Consultant MAX Manufacturing Software Working with MAX and Related Technologies Since 1987 MAX ERP System Implementations and Projects MAX, Dynamics GP, Synergy, Event Manager, Crystal Reports, SQL Reporting Services, Database and System Migrations and Updates, MAX Training Classes - All Levels, Custom Reporting.
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