When saving a Business Reporter report to the server you need to provide a folder. So it will be always saved in to a folder in folder structure. This functionality was added in Apps 10 onwards.
For upgrade customers there could be reports that are not connected to a folder (which are saved before this feature is introduced).
By using this dialog it is possible to connect those reports to folders in folder structure, by simply drag and drop those reports.
Also it is possible to move reports from one folder to another in within the Folder structure as well.
After organizing the reports in to folder structure, you should be able to see the same structure in Order Report dialog also.
With the introduction of this new Save Report Dialog, you should save the report to a folder. Use Add Root Folder link to create a folder and select it before providing other details.
It helps to categorize the reports in a logical way, according to report designers needs.
I can see there are reports that are still not connected to a folder. Those are once has been saved using earlier versions of Business Reporter. Go to Manage Report Structure dialog to easily organize those reports.
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