Since the long-awaited and welcome release of financial tags in 10.0.32, and ongoing improvements, the new omnipresent question that now appears on every project is: should we use a financial dimension or a financial tag?

Tags or dimensions? The new perennial

To their credit, the team have done a decent job of comparing financial tags and financial dimensions in this Microsoft Learn article, but I’ve always felt it could be made a bit clearer.

For this post, I’ve made an infographic and a streamlined version of the comparison table. Please feel free to use them to help your decision-making process, but always refer to wider documentation and your Microsoft partner/contract experts for guidance.

It’s infographic time…

Here we go! Boiled down to no more than four key questions, this infographic offers a decision-making flowchart to determine whether your supporting ledger data requires use of financial tags or financial dimensions.

We think it covers most bases and hopefully you do to! Constructive feedback, as ever, is most welcome:

This work is licensed under CC BY-ND 4.0 . As per the licence, please feel free to download, re-post and re-use this infographic, but please do not modify it.

Also available to download in SVG format.

And the bonus prize

Secondly, as promised, here’s a more streamlined version of the table on Microsoft Learn:

FunctionalityFinancial dimensionsFinancial tags
Account structures and validationDimensions must be included in an account structure, to determine valid combinations for each main account. Values must exist in order to post.Tags operate independently of account structures and are not validated during entry or posting. It is not possible to mandate a tag value and new/incorrect values are automatically saved.
Defaulting1Default dimension values are pulled from master data, such as customers, suppliers, or products.Default tag values are not pulled from master data.
Reporting2Dimensions can be included in a dimension set, which is used to calculate totals for the ledger account. Account segments can be parsed out, and used to sort/filter the detailed transactions.Tag values aren’t included in dimension sets and you can’t generate a trial balance to view balances for tag values. On drilling down, tag values are visible in separate columns and can be sorted/filtered.
Impact on General ledger processesAlthough dimensions are considered unlimited, the more dimensions that are created and used in a dimension set, the slower transaction entry, import, and processes will become.Because tags have no structure or validation, there’s minimal impact when they’re used on transactions or imported via an entity.
Unique valuesDimensions should only be used to track values that are reused. Extensive unique dimension values will significantly affect system performance.Tags should be used if you are looking to track unique values, such as document numbers or reference numbers.
Activate or deactivateOnce activated, Financial dimensions can’t be deactivated. They can only be removed from an account structure, so that they’re no longer used in future.Tags can be activated or deactivated at any time.
DeleteDimensions can’t be deleted if they’re referenced anywhere, to maintain referential integrity.Tags can’t be deleted, but can be deactivated at any time. If a tag references an entity for a list, no reference to that entity is maintained.
Ability to edit after postingDimension values can’t be edited on posted transactions, because this would directly affect financial statements.Tag values are used only for internal analysis and processing, so can be added, removed, or edited on posted transactions (using the Edit internal voucher data). An audit trail is maintained for edits made to posted tag values.
Global or legal entity specific?Dimensions are set up globally and “assigned” to legal entities through account structures. Dimensions also have legal entity overrides.Tags are set up at the legal entity level. They can be shared by using the Shared data feature. The tags and custom tag values can be manually copied to each legal entity via DMF.
  1. Both dimensions and tags will default from a document header to the lines, and for journals, they pull from the journal header to the account, and from the account to the offset account. ↩︎
  2. Values for both tags and dimensions can be viewed on each detailed transaction after drilldown. Detailed transactions can be exported to Excel or Power BI. ↩︎

Published by Mike Pearsall

Mike is a founding editor of AX7 - The D365 F&O Blog. He is a business and solution architect with experience of successfully implementing D365 F&O on both client and partner side, as well as strong knowledge of the wider D365 suite and Power Platform.

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