Moving Sage 100 to the Cloud: Accounting Dimensions
How Accounting Dimensions Transform Reporting
The building block of a business’s financial reporting has always been its chart of accounts. However, as your business grows larger and more complex and seeks better, faster, and more detailed business intelligence, your chart of accounts grows too. Soon you find yourself adding segments to track additional information, complicating the core operations of your business.
While the chart of accounts may be here to stay, there’s a powerful yet simple way to take your business intelligence reporting beyond the chart and into the next dimension.
Join us for a webinar: How Dimensional Accounting Transforms Reporting. See how to create more dynamic reports, while minimizing overhead and maintenance.
First let’s take a closer look at the pitfalls of the traditional account number and how a straightforward solution called dimensional accounting can help.
Hard To Isolate The Good Stuff
The complex, multi-segmented chart of accounts structure inherently complicates financial reporting, as your reporting tools must be able to isolate and aggregate individual segment data. It’s also inherently limiting because you can only easily report on data defined by a segment, not by other attributes. And really, how many segments should one account number have?
In addition to complicating financial reporting tasks, charts of accounts can grow to be huge and overly cumbersome. With a segment representing the core account number, another the department, another the location, and so on, account numbers for some companies can grow to over 40 characters and ten segments long. They add up quickly, too. We’ve worked with companies that literally have thousands of general ledger account numbers. It’s simply not sustainable.
Growth Limiting and Error Inducing
The lengthy account structure not only complicates financial reporting, but it means you must create a whole new group of account numbers every time you add a new location or department. It’s a considerable amount of manual data entry that takes time away from more strategic tasks.
Then there’s the matter of remembering which account number to use. When you start getting into the dozens, hundreds, or (dare we say) thousands, you cannot expect employees to correctly remember and then find the correct account during data entry. Inevitably there will be mistakes that, when they’re (hopefully) detected, take time to correct.
We create these lengthy, segmented accounts for the purpose of tracking specific transactional and operational data. We’re using account segments to tag that data with additional information to help us analyze it later. What if you could tag that data independently of its general ledger account number? You can with dimensions.
Dimensions Are a Better Way
A dimensional chart of accounts, also known as a multi-dimensional chart of accounts, is a financial accounting structure incorporating additional dimensions beyond the traditional account codes. Dimensions allow for a more comprehensive view of financial data by facilitating the categorization and analysis of transactions based on various attributes.
In a dimensional chart of accounts, the additional dimensions capture different aspects of a transaction, such as department, product line, geographical region, customer, project, or any other relevant categorization. Each dimension represents a different perspective or classification that you can apply to financial transactions.
Think of dimensions as bits of user-defined information associated with any transaction. And a transaction can have multiple dimensions. By using dimensions, you need only set up your primary account code. No more segments!
By using a dimensional chart of accounts, your organization can analyze financial data more granularly and flexibly. It enables you to track and report on specific dimensions, facilitating detailed analysis, performance measurement, and better decision-making. In addition, you can combine and filter dimensions to generate customized reports and insights tailored to different stakeholders’ needs.
Imagine this—when you add a new location, there’s nothing to add to your chart of accounts—you just fill in that location code in the appropriate dimension field associated with a transaction. As your business gains more complexity, simply add additional dimensions. Some of our clients use dimensions to track information like salesperson, vendor, employee, industry, or department. You likely have a list of your own data that, until now, has been too difficult to track.
Sage Intacct: The Leader in Dimensional Accounting
Implementing a dimensional chart of accounts requires using specialized accounting software or an enterprise resource planning (ERP) system that supports a multi-dimensional general ledger.
Using dimensions and Sage Intacct’s powerful, flexible reporting tools, you can slice and dice your financial information to create more focused and more intelligent analyses that reveal previously unavailable facts and trends about your business.
Considering a Move From Sage 100 to Sage Intacct?
Whether you’re new to cloud financial solutions or want to learn about Sage Intacct we have answers. Explore these Sage 100 to Sage Intacct migration resources.
Ready to talk about moving from Sage 100 to Sage Intacct cloud ERP and accounting solution? We’re here to help you decide if it’s time to make the move. Contact us for a free consultation.