If you want to use your natural general ledger (GL) accounts, departments and any other segments on which you need to report, ERP systems traditionally require you to create a fully qualified general ledger (GL) account. This means taking the time to set up several hundred accounts, not to mention the unwieldy process of managing all of them.
For example, a company that needs to report on 50 natural GL accounts at a departmental level, and 5 departments needs to set up 50×5, or 250 fully qualified GL accounts. Also, take into consideration that this may require a location or any number of other reportable segments.
A much more simplified method is dimensional accounting. Here, we explain how it works. See also, sample screen grab, (Image 1) below, which shows the dimensions, encircled in red.
What is dimensional accounting?
With dimensional accounting, you would set up each segment of the items on which you will report in a separate field. You can then tag each transaction with the appropriate dimensions. This allows you to maintain each segment separately, thereby limiting the overall maintenance on GL accounts and your chart of accounts remains pure.
This is available with Intacct, which allows you to tag transactions throughout the product to ensure you don’t miss a single detail in your reporting. You can also identify by GL account when a segment value is required, so your users entering data can’t inadvertently miss tagging a transaction.
Intacct also takes this one step further by making sure the dimensions are available in their built-in reporting tool. This means the days of needing complex skills in order to write a departmental transaction report are over.
How can dimensional accounting help you?
Think of the time it takes you to add GL accounts to your system when you simply add a new department or location. Dimensional accounting makes this a single set-up as a dimension value, making it now available throughout the system and in your reports. You know how much time it usually takes to create new reports when a department or location is added so you can report on that new value.
Dimensional accounting is not only easy to use but it’s a significant time saver at every step of the process—set-up, data entry and reporting.
It simplifies something that has traditionally been a system administrator’s challenge, making it so easy it can be done in minutes. It combines flexibility and functionality to grow your business without adding a burden on the back end.
Contact MicroAccounting to learn more about how dimensional accounting can help make your reporting process more efficient and how Intacct’s cloud based accounting system can handle dimensional accounting natively.