Finance and Operations glossary

This glossary defines key terms and concepts in Microsoft Dynamics 365 for Finance and Operations.


accounting journal

A journal that is used to record the financial consequences of accounting events in an accounting system.

accounting rule

A rule in an accounting system that controls the principles, methods, and procedures for classifying, recording, and reporting the financial consequences of accounting events.

ACH (Automated Clearing House)

An electronic funds transfer system available in the United States that facilitates the transfer of funds between receiving party and originating party bank accounts.

actual quantity

The measured quantity that is input into or output from an activity.

address verification

The service that is provided by a credit card processor that validates that the billing address provided by a card holder matches the information on file with the issuing bank.


The process of classifying time periods by age.

aging period

The number of days in a time period used to report an overdue customer payment balance.


balance sheet

A statement of the financial position of an organization that reports the state of assets, liabilities, and equity on a specified date.

balance sheet account

An account that describes the changes in value reported on a balance sheet.

bank reconciliation

A practice of reconciling a ledger account that represents a bank account by matching ledger account entries to bank statement entries.

batch attribute

A product attribute of a process batch or a transfer batch.

best-before date

A recommended date for obtaining the optimum quality or characteristic of a product.

best-before period

The time period in which to obtain the optimum quality or characteristic of a product.

bill of exchange

A source document that documents an unconditional request for a third-party to pay a second party on demand.


The action of placing a document or product on hold.

BOM (bill of materials)

A list of products and their quantities that are required to produce one product.

budget control

A practice of authorizing expenditure only when budget funds can be reserved to meet future payment commitments.

budget control dimension

A combination of active financial dimensions values used to allocate budget funds to pay for planned activities.

budget control rule

The encoding of a business decision to check committed and actual expenditure against available budget funds allocated for detailed or aggregate activities defined by valid budget control dimension value combinations.

budget cycle time span

A time period specified as a number of fiscal calendar periods. The budget period can be different from the accounting period.

budget group

A set of financial dimension values in a budget dimension hierarchy that is used to calculate aggregate budget funds allocated to superordinate financial dimension values by summing budget funds allocated to subordinate financial dimension values.

budget model

A planning structure used to schedule budget fund allocations and expenditures.

bulk item

A formula item input into a product delivery activity.


The combination of a number of products for sale as one unit.

business unit

A semi-autonomous operating unit that is created to meet strategic business objectives.


capacity load

The maximum amount of scheduled work that a work center can perform at a required capacity level.

capacity planning

A procedure for determining the resource capacity requirements that meet the demand of future output during specific time periods.

carry-forward budget

The budget that is transferred from one fiscal year to the next and that is reserved for open purchase orders in the new fiscal year.

cash-generating unit

The smallest group of classifiable assets that generates cash independently of other assets within an organization. These groups of assets are used to measure impairment losses that will be incurred.

catch weight

The actual or nominal weight of a sales item or inventory item.

chart of accounts

A list of main accounts.

COGS (cost of goods sold)

An accounting category used to sum the financial consequences of manufacturing products and carrying inventory.


A role assumed by a person who participates in a contractor-employer relationship with a legal entity.


An item produced jointly with another item.

cost center

An operating unit whose managers are accountable for budgeted and actual expenditures.

cost variance

The difference between an expected cost and an actual cost.


The process of calculating, assigning, and allocating the cost of economic resources acquired, produced, or delivered by an organization.

CTP (capable-to-promise)

The portion of product output from available operations resources and available input product required to fulfill a specific customer requirement.

currency code

An alphanumeric identifier that represents a currency unit.

cycle time

The time taken to complete an activity.



The typical start page in Finance and Operations. On the dashboard, users see a section for each workspace that they have access to. Each section displays the tiles from the summary sections in the related workspace. The dashboard consists of a name and sections with tiles.

data entity

An information structure that represents the data characteristic of an entity.


A delegate is a type that represents references to methods with a particular parameter list and return type.

delivery note

A business document that documents the delivery of products between two parties.

demand forecast

A prediction of future product demand.

demand forecasting

A business process that estimates future demand and creates demand forecasts based on historical transaction data.

deployable package

The vehicle used for deployment on User Acceptance Test (UAT) and production environments.


A Visual Studio tool that you used to create, update, and inspect your model elements.

dimension-based product configuration

A configuration technology used to create product variants by selecting values for product dimensions.

distinct product

A uniquely identifiable product.

document management system

An application service for storing and handling an organization's documents.


In the security model, a set of application access privileges that are required for a user to carry out their responsibilities.


EFT (electronic funds transfer)

A networked system for transferring funds from one bank account to another.


An event lets a class or object to notify other classes or objects when something of interest occurs.

EPE (Every Product Every)

A lean concept that is used to establish a regular repeating production cycle.


Customizing an application by adding functionality to existing code.


financial dimension

A financial data classifier created from the parties, locations, products, and activities in an organization and used for management reporting.

financial dimension value

A data element in the domain of a financial dimension.

financial statement

A report that documents the financial information and financial position of an organization.

fixed cost

A cost that does not vary with changes in product delivery throughput or output.

fixed currency

A currency that has a fixed exchange rate in relation to another currency.

fixed quantity kanban

A type of kanban that is used when the number of kanbans that are assigned to a kanban rule is constant.


A numeric relationship among production process inputs and production process outputs.

formula item

An output of a batch process controlled by a formula.


general budget reservation

A document that is often used by public sector entities to set aside or earmark budgeted funds so that those funds are not available for other purposes.

grace period

The time period beyond a specified date during which an obligation can be fulfilled without penalty.

GST (goods and services tax)

A value-added tax levied in some countries/regions.



Occurring between or relating two or more legal entities that are part the same organization that consolidates the accounts of all legal entities.

invoice matching

A practice of matching vendor invoice prices and product quantities to purchase orders and product receipts.

item allocation key

A product family grouping that is used for forecast and demand scheduling.

item relation

A reference to the item allocation group or the item and its product dimensions in a kanban rule.



A signal that communicates a requirement for a quantity of product.

kanban flow

Defines the sequence of activities that are performed for kanbans that are created for a kanban rule.

kanban job

A process or transfer activity in a production flow that is triggered by a Kanban.

kanban job consumption

The withdrawal of product components from inventory in order to complete the kanban production jobs.

kanban rule

A rule in a lean manufacturing system that realizes material planning and replenishment policies by controlling how process and transfer activities are coordinated in production flows.


lean manufacturing

A philosophy in which manufacturing operations promote lean production flows and business activities.

lean schedule group

A way in which to aggregate items for production, for example, based on a setup group, shipping group, or transport group.

ledger account

A classifier created from the combination of main account value and other financial dimension values listed in a chart of accounts and used to classify the financial consequences of economic activity.

license code

An alphanumeric key that grants a party the right to use software or software components as prescribed in the terms of the license agreement, and that activates and inactivates software modules, software capabilities, and software functions.


The ability of a party to use current assets to settle current liabilities.


master scheduling

The process for generating a timetable for matching supply with demand.


A model contains code elements and reference metadata. It is created and inspected in Visual Studio.

model element

A model is a group of elements (source files and metadata) that constitutes a distributable software solution. The model is a design-time concept.


NBV (net book value)

The value of a fixed asset calculated as the difference between the original cost of the fixed asset minus its accumulated depreciations.


object permission

A permitted create, read, update, delete, or execute operation on a securable object.

operating unit

An organization that divides the control of economic resources and operational processes among people who have a duty to maximize the use of scarce resources, to improve processes, and to account for their performance.

output product

The physical products that result from an activity.


A method of customizing source code by providing new source code that overrides the default source code.



A package is a compilable and deployable unit of one or more models.


A person or organization that participates in economic activities.


The process of tracing the quantity of a required item to its source.

pegging event

A resource flow event that signals the demand for a product.

planned intercompany demand

Predicted demand for a product by a legal entity that assumes the role of a vendor. The planned demand is generated from planned demand for the product from a downstream legal entity.


To record the monetary value of an economic event in a specific account, or to summarize and reclassify general and subsidiary journal account entries into general and subsidiary ledger account entries.


The person who creates a source document to initiate a request for economic resources.

procurement catalog

A listing of product offerings that are grouped by procurement category. A procurement catalog is used to request products for internal use by an organization.

product dimension

The size, color, or configuration product attributes that are used for dimension-based product configuration.

product family

A unique grouping of items, services, or rights that either participates in the same production or delivery activities or that are offered to the same market segments. In Finance and Operations, the grouping is represented by using a forecast allocation key.

product master

A standard or functional product representation that is the basis for configuring product variants.

product receipt

A source document that documents the receipt of products ordered, the receipt of products returned, or the receipt of products received on consignment.

product variant

A configuration of a product master.

production flow

A production process designed using Lean principles.

production flow model

A representation of the production capacity provided by a group of work cells in a production flow process.

production order

A source document that documents the requirements for producing items to meet a demand.

production schedule

A schedule to produce a specific item and item quantity at a specific time and by specific human and operational resources.


A participant that has the existing and potential ability to provide a service or probable future economic benefit to a legal entity.

purchase agreement policy

A policy that authorizes parties to modify purchase agreement terms.

purchase order policy

A policy that authorizes parties to modify purchase order terms and to control order processing.

purchase quotation

A source document that documents an offer to purchase a quantity of product for a specified price and by a specified date in response to a request for quotation in a procurement process.

purchase requisition

A source document that documents product requests so that they can be submitted for review and be used to authorize purchasing by a purchasing organization.


quantity variance

The difference between an ordered product quantity and a received product quantity when no more receipts are expected.


receipt advice

A business document that documents a summary of the products a buyer receives from a vendor.


A practice of adjusting two or more accounts or statements so that the figures agree.

reduction key

A method that is used to increase or decrease forecast requirements in master planning, based on user defined percentages that are applied during specific periods.


A record that is used to record the operational, legal, and financial consequences of resource flow events in an accounting system.

RFQ (request for quotation)

A source document that documents an invitation to bid on supplying a quantity of product for a specified price and by a specified date.


The person who requests the economic resources.


sales agreement

A source document that documents an agreement between two or more parties based on an understanding that a selling party will commit to selling a specific quantity or value of product over a period of time in exchange for favorable prices and discounts.

sales agreement policy

A policy that authorizes parties to modify sales agreement terms.

sales order policy

A policy that authorizes parties to modify sales order terms and to control order processing and payment processes.

sales quotation

A source document that documents an offer to supply a quantity of product for a specified price and by a specified date in response to a request for quotation in a sales process.

security role

A defined set of application access privileges. The security role assigned to a user determines which tasks the user can perform and which parts of the user interface the user can view. All users must be assigned at least one security role in order to access the system.

segregation of duties

A design principle used to reduce the risk of fraud, irregularities, and errors that separates the recording, verification, authorization, custody of assets, and periodic review duties of people who participate in, document, or record the financial consequences of economic transactions.


The order in which jobs are processed or operations are performed at a manufacturing facility to achieve objectives.

shared asset

An asset that is used by more than one cash-generating unit (CGU). An example is a distribution center that is used to store items before they are transported to different markets that share that same distribution center.

single use kanban

A type of kanban that is used with a fixed quantity kanban rule to meet exceptionally high demand. A single use kanban does not trigger a new kanban when it is discarded.

smart rounding

A marketing practice to use odd numbers that are marginally less than their nearest round number to set prices.

source requirement

The product quantity documented on a source document line that creates a pegging requirement.

statistical baseline forecast

An estimate of future demand that is created by applying a forecasting algorithm to historical transaction data.


takt time

The time that it takes to produce one unit of a product.

Task guide

A controlled, guided experience through the steps in a Task recording. A Task guide leads the user through the experience that was recorded. All security, data, and application behaviors are the same when completing a Task guide as they are without the Task guide. The Task guide uses the same instrumentation as Task recorder to know when a user has completed the intended step, so that it can prompt the user to take the next step in the recording.

Task recorder

A tool that is pre-installed in Finance and Operations. When recording, it records all events that the user enters in the Finance and Operations user interface that get executed against the server—including values added, settings changed, data removed, etc.

Task recording

A file that contains the actions and annotations that are captured when Task recorder is run in Finance and Operations.

three-way matching policy

A matching policy that requires one or more vendor invoice prices to match with one or more purchase order prices and that requires one or more vendor invoice quantities to match with one or more product receipt quantities.

transfer batch

The quantity of one or more items that is transferred or that can be transferred.

two-way matching policy

A matching policy that requires one or more vendor invoice prices to match with one or more purchase order prices.


value stream

An operating unit that controls one or more production flows.

variant configuration technology

A method of modeling product masters and searching for product variant configurations.

VAT (value-added tax)

A tax on products at each stage of their production based on the value added during that stage.

vendor catalog

A listing of product offerings that are available for purchase from a vendor.

vendor invoice

A source document that documents a vendor payment request. A vendor invoice can refer to one or more purchase orders. When the vendor invoice is authorized, a payment can be made to the vendor.


work cell

A resource group that participates in a production flow activity.


A person who assumes the role of an employee or a contractor and is paid in exchange for services.


A page that provides an overview of one of the activities that the user performs. The page uses tiles, lists, and charts to display pending work and related data from multiple sources, and the page surfaces frequent tasks related to this data. Tiles shown in the summary section of the workspace are also displayed in the related section in the dashboard.