Independent Microsoft Dynamics NAV Software Review

The Microsoft Dynamics NAV ERP Suite

Finance and Accounting Software

As with most finance and accounting software modules within an ERP system, Dynamics NAV delivers the primary core accounting modules of general ledger (including financial management and cash/expense management), accounts payable, accounts receivable, bank account management, fixed assets, resource management including job costing for people and machinery costs, and multi-entity accounting and consolidation.

Key accounting features and capabilities which tend to be particularly strong and stood out in our ERP software review include multi-journal and overlapping accounting periods, real-time posting (no monthly closes), credit and collection management, change logs, strong procurement functionalities, flexible req to check processes and versatile job costing/project accounting (with integrated service management and features such as assignment of alternative pricing within jobs and to different job types).

Perhaps due to its origination in Europe, the multi-currency capabilities are particularly advanced, supporting flexible exchange rate types and capabilities (i.e. buy, sell, spot and custom rates), multiple account setups for use with different currencies, multiple reporting options on the various currencies, last update stamps, auto calculation of realized and unrealized gains and losses, and support for FASB 52. Additional international accounting capabilities include strong support value added tax (VAT), GST and sales tax calculation capabilities as well as multiple languages.

The fixed assets module permits flexible standard or custom depreciation methods, simple asset cost accumulation (i.e. acquisition, maintenance and insurance costs), depreciation allocations to lines of business or cost centers and GL integration. However, fixed assets software is delivered with few predefined depreciation methods, weak management for multiple deprecation books, doesn't accommodate leases well and provides very minimal reporting.

As with any accounting software system, the solution cannot be all things to all people. Some of the Dynamics NAV weaknesses in terms of accounting include contract and trade management, fund accounting or similar encumbrance accounting, sophisticated budgeting and financial statement report writing (since the sunsetting of FRx and replacement with Management Reporter). Although Microsoft NAV accounting software offers many of the processes required for proper back-office record keeping, some of those processes are disconnected and must be done manually. However, to mitigate many of the weaknesses there are partner solutions that address missing or deficient functionalities and further automate some of the more tedious accounting tasks.

As with other Dynamics ERP systems, Microsoft NAV is sold with the Business Essentials, Advanced Management, and à la carte packs, and most of the same modules found within Dynamics GP and Dynamics SL are available.

Overall, Dynamics NAV is one of the stronger accounting software suites within the four Dynamics line of ERP software products—which also include Dynamics AX, Dynamics GP and Dynamics SL. Dynamics AX also delivers very strong finance and accounting functionality, but tends to appeal to larger midmarket and enterprise sized prospects seeking broader ERP capabilities.

Distribution and Supply Chain Management Software

Since one of Dynamics NAV's target verticals is distribution, the ERP software supports common supply chain and distribution business processes and feature sets. Such functions include inclusion of substitute items, item cross-referencing, handling of non-stock items as stock items, multiple location inventory, specific costing for inventory management, transfer of stock (between locations and status'), SKU maintenance, available to promise (ATP) and order promising, calendaring, item tracking, return management, and warehousing, which includes many warehouse management system functions such as cross-docking, directed putaways, auto replenishment, automated data collection, cycle counting, and item charges.

A few deficiencies within Dynamics NAV ERP system include lack of solid e-commerce functionality, retail (Point of Sale) tools, and automated data collection methods at detailed levels for inventory adjustments. Less strategic voids include things like poor support for repeating and recurring orders. While the ERP software does not posses business process management (BPM) or workflow automation tools, there is a basic routing and approval capability for procurement processes which supports transaction authorization and email routing chains as well as simple configuration options such as approval limits and substitute approvers.

A few Microsoft partners have created industry-specific supply chain software add-ons, such as heavy equipment rental, further detailed functions for data capture, including inventory adjustments, shipping and receiving, inbound/outbound order processing with product management capabilities, and demand planning.

Manufacturing Software

Dynamics NAV offers the traditional manufacturing software functions: production order management, backflushing and forward flushing, serial and lot number tracking, multiple order processing, multiple bill of materials (BOM) versioning for production orders, multi-location material requirement planning (MRP), forecasting and master production scheduling (MPS), production scheduling, multiple routings, capacity planning, subcontracting by work centers, work center resource planning and capacity constraints, parallel scheduling, scheduling ahead for just in time scheduling (JIT), scrap and stop codes, and finite supply management for constrained resources.

Production Orders and Bills of Materials (and related Kitting) are underlying tenants of the manufacturing system—so these tend to be the strongest areas. Supply planning, demand forecasting, capacity planning, machine centers and finite loading are all supported, but tend to be much more basic.

Inventory management supports serial and lot tracking, flexible inventory costing methods (including LIFO, FIFO, Specific, Average and Standard) by item, seamless integration with procurement (for sourcing) and sales (for depletion) and simple business processes such as location to location transfers, physical counts or adjustments. While inventory meets most business requirements, certain functions—such as the process for landed cost adjustments or the sequence of picking/shipping/releasing/invoicing items—seem atypical relative to most ERP systems and may take some getting used to.

A few weaknesses of Dynamics NAV manufacturing include lack of engineer-to-order (ETO), shallow quality management (QM), awkward handling of labor when not created as an operation, and inability to quarantine by stock status. However, workarounds in configuration can partially compensate for the quarantine issues. Lack of deep process-based manufacturing is another limitation for batch or mixed mode manufacturers. MS Partner solutions are available specifically for certain verticals such as equipment leasing; industrial equipment manufacturing; ETO; food; life sciences; and process, chemical, and recipe management.

Overall, the Microsoft NAV manufacturing software integrates well with back-office financials, delivers good visibility (such as product availability at the sales order process or requirements visibility on the shop floor) and fairly handles most simple discrete manufacturing business requirements.

Payroll & Human Resources Software

Microsoft NAV payroll processing performs the basics well, including flexible compensation types, thorough reductions/deductions/allowances, integration to project accounting, simple tax and regulatory compliance, and simple reporting.

For project management's payroll components, such features as resource tracking capacity management and multiple costing can be applied to project payroll to track time and expenses. Similarly from a financials perspective, the payroll can split an employee's earnings to multiple GL accounts (for allocations, cost center tracking, etc.) and the payroll module posts burden and overhead to both the ledger and projects. Standard reports such as 941s and W-2's (on electronic media) are provided. 1099 reports are produced in the Accounts Payable module.

On the downside, our review of the Dynamics NAV payroll software found the setup and configuration confusing relative to payroll modules in other midmarket ERP software reviews. Detailed employee time and attendance tracking and automation of data collection for recording tasks are notable weaknesses in the payroll software module. Tracking of settlements, commissions, and bonuses as well as separating confidential payroll information (i.e. for top executives) and audit trails are also limited.

Dynamics NAV has simple and limited human resources software functionality. The HR software solution covers the basics such as flexible employee profiles, benefits tracking, vacation scheduling, unique absent code creation (which aids in reporting), free form comments and flexible attributes to employee records, and candidate tracking. Customers often opt for the employee portal as an add-on to enhance HR access and extend HR and payroll features.

Microsoft NAV payroll and human resource software is best suited for straight-forward, single country entities without collective bargaining units or other similar complexities. Microsoft NAV payroll and human resource software compares fairly with competing SMB ERP software solutions. However, as a general rule, ERP software manufacturers often do not posses the domain expertise or focus as compared to best of breed payroll software publishers. Organizations with more sophisticated payroll or HR processing needs may be best advised to consider an integration approach with a payroll and HR software pure play provider.

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