Drag and Drop Question A company uses the basic budgeting functionality in Dynamics 365 Finance. You are creating the budget in the system for the upcoming fiscal year. The company uses budget…

The correct answer is On the Budget register entry form, select the budget model corresponding to the new fiscal year.; In the Allocate to dimensions form, select the appropriate predefined allocation term for splitting the budget balance between both business units.; In the Transfer balances form, filter on the IT and Infrastructure business unit and enter a factor of 1.5 for the last fiscal year selection.; Submit the Budget register entry to the approval workflow. Dynamics 365 Finance - Budget Creation for Split Business Unit Scenario Summary You need to create a new fiscal year budget for two new BUs (Business Applications and IT Infrastructure), replacing the old IT and Infrastructure BU, at 1.5× prior year actuals. Budget workflow…

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Question

Drag and Drop Question A company uses the basic budgeting functionality in Dynamics 365 Finance. You are creating the budget in the system for the upcoming fiscal year. The company uses budget workflow approvals to process budget entries. The company plans to split a business unit named IT and Infrastructure into two business units: Business Applications and IT Infrastructure. You need to create the budget for the two business units based on 1.5 times the original business unit actuals from the past year. Which four actions should you perform in sequence? To answer, move the appropriate actions from the list of actions to the answer area and arrange them in the correct order. Answer:

Exhibit

Answer Area

Drag items

Add a new line to select IT and Infrastructure with an Amount type expense and add a comment to explain the transferred balance between the business units Business Applications and IT Infrastructure.In the Allocate to dimensions form, select the separate Business Applications and IT Infrastructure business units, and enter a factor of 1.5.In the Allocate to dimensions form, select the appropriate predefined allocation term for splitting the budget balance between both business units.On the Budget register entry form, select the budget model corresponding to the new fiscal year.Submit the Budget register entry to the approval workflow.In the Transfer balances form, filter on the IT and Infrastructure business unit and enter a factor of 1.5 for the last fiscal year selection.

Correct arrangement

On the Budget register entry form, select the budget model corresponding to the new fiscal year.
In the Allocate to dimensions form, select the appropriate predefined allocation term for splitting the budget balance between both business units.
In the Transfer balances form, filter on the IT and Infrastructure business unit and enter a factor of 1.5 for the last fiscal year selection.
Submit the Budget register entry to the approval workflow.

Explanation

Dynamics 365 Finance - Budget Creation for Split Business Unit

Scenario Summary

You need to create a new fiscal year budget for two new BUs (Business Applications and IT Infrastructure), replacing the old IT and Infrastructure BU, at 1.5× prior year actuals. Budget workflow approval is required.

Why This Specific Order

Step 1 - On the Budget register entry form, select the budget model corresponding to the new fiscal year.

Why first: The Budget register entry is the container document for all budget data. Nothing else can happen without it. Selecting the correct budget model ties the entry to the upcoming fiscal year's planning cycle. This is the mandatory starting point - all subsequent actions operate on this entry.

Common mistake: Skipping straight to Transfer balances without first establishing the budget register entry and model. Transfer balances needs a target budget model to write into.

Step 2 - In the Allocate to dimensions form, select the appropriate predefined allocation term for splitting the budget balance between both business units.

Why second: Before any balances are moved, the system needs to know how to split the IT and Infrastructure amount across the two new business units. The predefined allocation term defines the proportional split (e.g., 60/40 or 50/50). Selecting it here configures the allocation rules that the Transfer balances process will reference when distributing amounts.

Common mistake: Choosing the other Allocate to dimensions option - manually entering Business Applications and IT Infrastructure with a factor of 1.5. That option conflates two separate concerns: the split logic (handled by the allocation term) and the scaling factor (handled by Transfer balances). The factor of 1.5 does not belong in this step.

Step 3 - In the Transfer balances form, filter on the IT and Infrastructure business unit and enter a factor of 1.5 for the last fiscal year selection.

Why third: Now that the allocation term is configured, Transfer balances performs the actual data movement - it pulls prior year actuals for IT and Infrastructure, applies the 1.5× multiplier, and distributes the scaled amounts across Business Applications and IT Infrastructure using the allocation term from Step 2. This is where the financial figures are calculated and written into the budget register entry.

Common mistake: Entering the 1.5 factor in the Allocate to dimensions form (Step 2) instead of here. Allocate to dimensions handles proportional splits, not year-over-year scaling. Transfer balances is specifically designed for the "prior year actuals × factor" pattern.

Step 4 - Submit the Budget register entry to the approval workflow.

Why last: Workflow submission is always the final action. The entry must be complete and accurate before it enters the approval chain. Submitting prematurely (before the allocation and transfer are done) would route an incomplete entry for approval, requiring rejection and rework.

Common mistake: Forgetting this step entirely, or assuming the entry is "live" once the transfer is done. With budget workflow enabled, entries are not active until approved.

Why the Two Excluded Items Are Wrong

Excluded Item	Why It's a Distractor
Add a new line for IT and Infrastructure with a comment	Manual line entry with a comment is not the correct method for this scenario. The requirement is to scale actuals automatically via Transfer balances, not manually document a transfer.
Allocate to dimensions: manually select both BUs and enter factor 1.5	This conflates scaling (1.5×) with splitting (allocation term). The 1.5 factor belongs in Transfer balances; the split belongs in the predefined allocation term. Using both would double-apply the multiplier.

Core Principle to Remember

In D365 Finance basic budgeting for this type of scenario:

Allocation term = how to split across dimensions
Transfer balances factor = how much to scale prior year actuals
These are distinct steps, applied in that order, within a budget register entry scoped to the correct fiscal year model.

Topics

#budget workflow#business unit split#allocate to dimensions#budget model

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