How dimensions work in Business Central

With Microsoft Dynamics 365 Business Central, you can organize financial data in a smart way. Not with endless accounts or clunky spreadsheets, but by using dimensions. They add extra layers of information to your administration, without making your chart of accounts unnecessarily complicated.

Dimensions: the vacation version 

Imagine you’re booking a holiday to Spain. At the end of the trip, you could simply say: “The whole vacation cost €1,000.” Done. But maybe you’d like to know later how much you spent on hotels, how much on food, and how much went to excursions.

Dimensions work like labels you attach to every expense. They don’t change the total amount, but they do give you insight into the breakdown: accommodation, meals, activities, or transportation. You could even distinguish between your own expenses and those of your travel companions.

In the same way, dimensions in Business Central help you split your company’s costs into clear categories. Instead of staring at one big lump sum, you can immediately see how everything is distributed.

Dimensions: the professional explanation

Within Business Central, you can think of dimensions as tags you assign to transactions. They add extra detail to your reports, without forcing you to create hundreds of different general ledger accounts.

For example, you could track:

• Department (Sales, HR, Logistics)

• Project (New webshop, Customer implementation)

• Location (London, Manchester)

• Cost center or product line

So, instead of creating separate accounts like “Travel – Sales – London” and “Travel – HR – Manchester”, you just use one Travel account and attach dimensions for department and location. Later you can filter reports to get exactly the detail you want.

Why this matters for SMEs

• A clean chart of accounts – fewer accounts, more insights.

• Smarter reporting – instantly see profitability by project, department, or location.

• Better decisions – managers quickly understand where budgets are going.

• Flexibility – combine multiple labels on a single transaction.

Real-world example

A company purchases €1,500 worth of materials. The cost is booked under Purchases, but two dimensions are added:

• Project = “Webshop 2025”

• Location = “Utrecht”

When reports are generated later, management can see exactly how much the Webshop 2025 project in Utrecht cost—without needing to create extra general ledger accounts.

How to set up dimensions in Business Central

1. Define your categories – Decide what you want to track (department, project, location…).

2. Add values – For example: Department = Marketing, Location = Manchester.

3. Assign while posting – Apply the labels to invoices, journals, or purchase orders.

4. Analyze the results – Use account schedules and analysis views in Business Central to filter and combine the data.

Common pitfalls

• Creating too many labels and making it overly complex.

• Forgetting to assign dimensions, leaving gaps in your data.

• Poor design of dimension structures, leading to unclear reporting.

FAQs

What exactly are dimensions?
Labels you attach to financial transactions.

Are they mainly useful for SMEs?
Yes, because they enrich reporting without bloating the chart of accounts.

Can I combine multiple dimensions?
Absolutely, a single transaction can carry several labels.

Do dimensions replace the general ledger?
No, they add context—the ledger remains the foundation.

How do I report on dimensions?
Using Business Central’s built-in reporting and analysis tools.

What happens if I set them up poorly?
You’ll end up with incomplete or confusing reports.

Conclusion

Dimensions in Business Central give businesses a practical way to get more out of their accounting. They make sure numbers aren’t just numbers; they become stories about where money goes and why. And that helps entrepreneurs gain clarity and control.