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[Ryan Porter]

All-  we are currently in the process of converting our current system (QuickBooks Enterprise) to NAV 2017.  We are early in this process and are looking at different ways to organize our chart of accounts (layout, numbering scheme, G/L accounts, etc).  Due to my lack of experience with NAV (including a lack of understanding on how to use dimensions), I’m struggling with the design and functionality of the COA inside of NAV.  With QB, you basically have to have a G/L account for every category wanting to be tracked as you do not have options to use something like dimensions.  There is also the ability to use sub-accounts and “class” tracking.

In the process of switching systems, we are also moving from basically a periodic inventory tracking to perpetual/ WIP inventory tracking with overhead allocations. Currently, we count and value our inventory at the end of the calendar year and make the needed inventory adjustment. Our intent is to use a FIFO approach in NAV.

I’m interested in different opinions, styles and organizational methods other have used when setting up their chart of accounts?  What are different numbering schemes you have used (alpha/numeric, long vs short, etc)?  Are there things you have done (relating to COA setup) which you wish were different or which you have changed now that you have experience with NAV?  Do you have any recommendations on “what not to do” when designing the COA?  Is there a scheme that works best with the reporting in NAV?

Finally (and I’m not sure if this is appropriate to ask on this forum so excuse me if not), would anyone be willing to share your COA with me so I can visually see your design?  Obviously, no financial data, but just a generic printout of the COA.  

NAV is so versatile and the possibilities seem endless.  I just don’t have the experience with NAV to know what I don’t know.  Any help is appreciated!

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Ryan- Porter
Controller
Milgro Nursery
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[Cynthia Priebe]

Ryan,

If you can get access to a Cronus Database (this is the name of the Company in the NAV demo database,) it may help you to answer some of your questions.

Every company has a unique chart of accounts and numbering scheme, but the accounts, their identifiers, groupings, subtotals and totals are probably a good place to start. The account numbering groups types of accounts into specific number ranges, and this is common. For example, revenue accounts are in the 40000-49999 range and direct expenses 50000-59999. In some companies these are 400-499 and 500-599, but you get the idea.

Look at not only at the Chart of Accounts, but also G/L Balance by Dimension from the Chart of Accounts list, Account Schedules, and other financial reports like Trial Balance to see how this structure works. 

In addition, your partner should be able to provide you with training on NAV related to this topic although they most likely will not provide you with any specific accounting advice (unless they are accountants.)

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Cynthia Priebe, MCTS, DCP
Senior Business Analyst and Project Manager
Liberty Grove Software
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[Ian Ray]

I would second the recommendation to look at CRONUS for ideas. We had to redo our COA once we implemented dimensions, so I would highly recommend setting dimensions up from the beginning. Dimensions are really the way to go; if we had a separate account for everything we track with dimensions, we would have thousands of accounts.

Since you are using NAV 2017 or greater, I would also recommend implementing General Ledger Account Categories. This feature makes it very easy to manage Account Schedules compared to the old way.

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Ian Ray
Cypress Grove
Arcata CA
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[Val Gameiro]

NAV sorts the Account numbers, so if you go with alpha or alphanum, just be aware. Certainly, it is most common to use numbers as mentions.

There are no sub accounts in NAV. I’ve seen people use Dimensions to accomplish this, and transform a clump of accounts (e.g. COGS, COGS Vendor A, COGS Vendor B, etc.) into a single account with dimension values (e.g. 50000 COGS, with VENDOR dimension = VENDOR A, VENDOR B, or VENDOR C, etc.).

You can group accounts inside BEGIN-TOTAL and END-TOTAL lines, so that when you INDENT the COA, it’ll look neat and sub-account. Plus, the END-TOTAL line will total all POSTING accounts in between.

If you need additional calculations, you can use the TOTALLING type, and then add a range followed by | to add another account (or range), and you can also use – to subtract, I believe.

Account categories will let you specify Assets, Liabilities, Equity, etc. to help automate the Account Schedules process of creating a BS or P&L. Account Schedules being were you define these types of financial reports. You can define the lines, and the columns. So, for the same P&L, you can look at it YTD and MTD, or PYTD, YTD and MTD. You can also compare to Budget lines, with a percentage change. You can throw all of a particular dimension on the columns, e.g. Department, and then filter the report by current month or current quarter or current year, and see how everyone is doing against their budget, for instance.

Lots of flexibility and power!
?

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Val Gameiro
Advanced Business Systems, LLC
Implementer/Project Manager
Austin, Texas
former NAVUG Austin Chapter Leader
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[Andrea Wasley]

The way it sorts is a very good ‘heads up’ and something that needs to be considered both in NAV and when going to Excel. 

When we first went to NAV (in 2001) – our accountants used leading zero’s for our dimensions (’01’, ’02’, etc.).  Years later however…we are removing the leading zero’s in many instances.  Moving data back and forth with Excel became frustrating – Excel does not handle leading zero’s well.

Good luck!!

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Andrea Wasley
Project Manager
NOCO Energy Corp.
Tonawanda NY
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[Ryan Porter]

Thanks for the comments everyone!  That’s the type of info I was looking for.  Every reply had something I was questioning.  I do have access to the CRONUS data base, so I will look there.  One of my goals was to keep the number accounts in the G/L as low as possible.  From your replies, it sounds like it is going to work how I was hoping.

For anyone who might be reading this post who is not a member of NAVUG, I highly suggest you join.  Some of the best money we have spent in our whole NAV experience!

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Ryan- Porter
Controller
Milgro Nursery
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[Kim Dallefeld]

Ryan , that’s just what NAVUG is about, so glad you are a member!  ????

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Kim Dallefeld
Kim@Dallefeld.com

Past NAVUG Board Chairman
NAVUG Programming Committee
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[Ramin Marghi]

Oh, man — I could quite literally spend hours talking about the Chart of Accounts and all the things to consider when drafting your chart. It may be because I’m an accountant that I put a lot more weight on this configuration than others, but I think it’s important to think this through, as the decisions you make today can possibly limit you in the future. I may write a blog post about this, actually, but in the interim, I just want to chime in to add this consideration:

Many of the “reports” that clients ask for in NAV boil down to lists. If you draft your chart of account with the appropriate level of classification, then you can effectively turn a total-filtered view of the chart into Dimensional financial statements. So all I’ll add to this discussion is to ensure your numbering accommodates the roll-up that you are looking for.

For example, if you choose 4-digit numbers, your Assets would look like:

1000 ASSETS
1100   Current Assets
1110       Cash and Cash Equivalents
1119       Cash and Cash Equivalents, Total
1120       Accounts Receivable
1129       Accounts Receivable, Total
1199   Total Current Assets
1999 TOTAL ASSETS

What this has effectively done is limited you to 8 posting accounts (for example, under cash/cash equivalents: 1111..1118).

If you go for 5-digits, you give yourself enough wiggle room to add 98 posting accounts (for cash/cash equivalents: 11101..11199).
10000 ASSETS
11000   Current Assets
11100       Cash and Cash Equivalents
11199       Cash and Cash Equivalents, Total
11200       Accounts Receivable
11299       Accounts Receivable, Total
11999   Total Current Assets
19999 TOTAL ASSETS

You might be wondering “Why the heck would I need 98 posting accounts”? Well, you might, but more importantly, you might also need one more level of sub-grouping if you wanted to, for example, roll-up your investments if you go down the rabbit hole of:

10000 ASSETS
11000   Investments
11100       Held-to-Maturity
11110           Bonds
11111              Canadian Bonds
11112              US Bonds
11119           Bonds, Total
11199       Held-to-Maturity, Total
11200       Available-for-Sale
11299       Available-for-Sale, Total
11999   Total Investments
19999 TOTAL ASSETS

That might be a messy off-the-seat-of-my-pants example, but I think it more or less illustrates the need to think through all the necessary groupings and classification for representation and disclosure.

Thanks!

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Ramin Marghi , CPA, CGA
CPA, CGA | ERP Consultant
Catapult
VANCOUVER BC
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[Ian Ray]

I would agree with what  is saying, ?except that I would recommend against making accounts like 11111, 11112. That is something we also changed when we remade our COA… now, everything is like 11110, 11120 or at least 11110, 11115, 11120.

This is just so when the time comes that you need to slot another account in between 11111 and 11112, it is possible.

I would also highly recommend against adding letters to these accounts. NAV will let you do it, but it can become a bit of a problem sorting and filtering outside of NAV later.

Edit: And I realize this was just a made-up example of subgroupings, I just wanted to warn against getting stuck not being able to insert an account because they were all created in order.

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Ian Ray
Cypress Grove
Arcata CA
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[Joe Gorman]

I apologize for posting to an old discussion but I have a question about Chart of Accounts design in NAV/BC that seems to fit the discussion.
Is it common not to have totaling accounts in the COA? In the above example there would be no extra accounts for the totals, so it would look something like below. 
Account Schedules could still be built using subcategories but if any new accounts were to be added the account schedules would need to be regenerated.
I was wondering if anyone had seen a COA without totaling and if they knew of any disadvantages to not having them.
Thank you…

10000  Bank 1
11000  Bank  2
11100   Other Cash
11200   Accounts Receivable
11300   Prepaid Expenses
11400   Inventory Raw
11500   Inventory WIP

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Joe
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[Andrew Good]

It is uncommon and we don’t recommend skipping the Totals in the Char of Accounts. It makes it much easier for the finance team to be able to quickly check the Chart of Accounts page, related pages and reports with the Totals in place. 

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Andrew Good
President
Liberty Grove Software
Oakbrook Terrace IL
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