Compliance – Microsoft Dynamics AX

July 7th, 2011 by Stephen Jones Leave a reply »

There are many standards to which companies strive to comply such as ITIL, SOX, BASEL ll , IFRS , ISO standards etc.There are several components to effective  compliance:

1. Standard Operating Procedures
AStandard Operating Procedure is typically instituted within a business to define  consistent process steps to follow and actions to be carried out. These assist in demysitfiyong processes and help with the training of new people executing any particular function or task.  Standard Operating Procedures should be defined to  meet the compliance requirement.

  • Perform More Processes Faster: Automated workflow helps to enforce compliance. Manual processes slow productivity. Microsoft Dynamics AX in built Workflowengine  lets organizations define the workflow steps and approvals with notifcations , esclaations etc .
  • Better Internal Controls with Approval Workflows for Financial Journals: Standard Operating Procedures also include enforcing internal controls for specific, pre-defined actions and processes. This can be especially relevant in financial processes.
  • Document and Record Tasks and Activities Automatically: Micorosft Dynamics Ax has a built in odcument handlign feature, this can attach any source or supporting  file to any record or transaction.  Templates cna also be added as  structured checklists .  The in built task reocrder allows  best practice to be automatically capturedby a key user  with screen shots and navigation path to create precise, step by step Work instructions  Accurate documentation of tasks and activities and making this information easily accessible are crucial components to enforcing standard operating procedures successfully. Microsoft Dynamics AX supports  logging and recording tasks and activities and making the information available from the Compliance Center, in Microsoft Office documents and in Microsoft SharePoint sites.
  • Improve Employee Compliance Awareness and Training: Publishing compliance practices and standard operating procedures and making those available within the organization is an important part of managing compliance and alsoa sssits in employee training of  compliance practices and company policy .

2. Documented Transactions
Many compliance requirements focus on recording exactly what happened, when, and by whom. For compliance requirements that ask for documented transactions, the transaction should be captured as close to the source of the transaction activity as possible.

  • Track and Trace Transactions: The audit trail system in Microsoft Dynamics AX supports compliance requirements that require documented transactions. Microsoft Dynamics AX makes it possible to identify the origin of an entry; the user who created the entry and the entry date and time. The inventory trace system also supports batch serial and lot number track and tracing to raw material lots. In addition, compliance reports such as Audit Trail enables users to view a list of transactions and who created them, transaction types, and accounts and vouchers by transaction date and created date. The audit trail reports are available from the Compliance Center.
  • Automate Quality Assurance: Microsoft Dynamics AX supports quality management by automating the quality assurance process and managing turnaround times when dealing with non-conforming products, regardless of their origination point.
  • Verify and Approve Transactions with Electronic/Digital Signature: Microsoft Dynamics AX enables obtaining approval information for user-defined compliance control processes electronically with electronic signatures. This feature can be used to comply with the Life Sciences process industry requiremenes and for general compliance scenarios in the  finance and public sectors.

3. Data Integrity
When you document transactions electronically to meet compliance requirements, there must be assurances that the data is available, secure, and tamper proof. In cases of sensitive data, such as credit card and Social Security information, this is a must, and if this data is mismanaged  then the organization may face significant risk and financial implication. To help ensure data integrity, systems and procedures (such as backup processors and disk systems) must be put in place to  ensure there is high availability of data.

Pro-actively Monitor Data Changes with Alerts: Alerts in Microsoft Dynamics AX help organizations monitor and control compliance-related business activities and events. Employees can quickly and easily create alert rules that deliver automatic notifications of changes to purchase orders, vendor address, customer records, data changes, and so on.

  • Standard Reports: Build compliant financial reports such as an income statement or balance sheet in Microsoft Dynamics AX. Ledger accounts can easily be mapped into line items. This helps organizations compose reporting rows based on given posting layers to produce financial statements for different generally accepted accounting principles (GAAPs).
  • Reduce Risk with Improved Security Settings: This starts nwith Active Directory integration. Security settings are set up and maintained in one place and no matter how much the system is customized the user security-features setup retains its integrity. Microsoft Dynamics AX gives organizations an efficient way to control who has access to what features and data. The administrator can create user groups that have permission to access specific functionality and data based on the organization’s business processes and needs. The administrator then assigns users to the individual groups. The users in each group can only see the functions and data for which they have permission. Security is role based and can be be defined down to record level within a field.
  • The Micorsft Dynamikcs Ax chart of accounts allows sytme accounts to be locked to prevent manual journ als ot those accoutns to ensure sub ledgers will always reconicle to the GL. Other features include the ability to specify default ofdset accounts, whether a proposal should be debit or credit for a specifc account, and balance control
  • Although an organization may document transactions and capture and securely store data, this is often not enough, on its own, to meet compliance requirements. There must also be a trail of exactly what changes happened to the data, when it changed, and who/what made the change. This trail of changes is typically referred to as an audit trail. The database log in Micorosft Dynamics Ax can log changes to master data tables for example who created a new account number, who changed a credit limit or term of payment. On the manufacturing side all BOMs and BOM versions have to be activated and approved

5. Segregation of Duties/Responsibilities
With highly critical decisions that carry high risk/high value, it is often not advisable to place full responsibility in the hands of a single individual. In a chain of related processes, this would mean separating the authority of people so that they could manage only sub-sets of an activity. In this way, two or more people are required to complete the entire process.

Microsoft Dynamics AX delivers an integrated and automated solution designed to help you manage the risks and costs associated with meeting compliance requirements. Furthermore, it extends your investment in Microsoft products and technologies, and gives you deeper visibility into and control of business practices that you can use to generate a competitive advantage.

The good news is that Microsoft Dynmaics Ax 2012 considerbaly enhances the compliance features for example: an enhanced work flow engine,  more advanced security options , sophisticated PO budget control,  ability stio scheidle staff based on certifcations and skills etc.

Pleasae find the following links for more information about IT compliance with Dynamics Ax 2009.

Partner Source :

Managing Compliance Whitepaper:

Microsoft Dynamics AX 2009 Demo:


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