GL Account Setup

  • GL Account Setup

    Posted by DSC Communities on April 11, 2017 at 11:27 am
    • Amber Schmoll

      Member

      April 11, 2017 at 11:27 AM

      We currently have our accounts setup like 000-000-0000.

      Entity: Company (we use MEM)
      Cost Center: We use mainly for elimination entries between companies and thinking about using for manufacturing product types and a few other distinctions.  
      Account: Balance Sheet and P&L account number

      We also use Analytical Accounting but don’t want to set this up for every GL account because it makes entering accounts payable invoices very time consuming.

      We are contemplating adding something to our GL to distinguish a department so we can better group expenses. Does anyone have any ideas as to how we can add this without having to overhaul our chart of accounts?

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      Amber Schmoll
      Senior Accountant
      Milk Source LLC
      Kaukauna WI
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    • Lucy Shows

      Member

      April 12, 2017 at 11:15 AM

      You can create account “Categories” and assign each account to them – see print screen below where this particular account, 5110, is assigned to the category “physician salaries”.

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      Lucy Shows
      director of budgeting and decision support
      Hattiesburg Clinic P.A.
      Hattiesburg MS
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    • Jen Kuntz

      Member

      April 12, 2017 at 11:48 AM

      Hi Amber,

      The short answer is it will depend on how you have numbered things already, as to what you can and cannot do easily. I love talked Chart of Accounts design (“geek accountant”) so I have some thoughts to consider.

      If you want to keep the same # of segments:

      • I’m not familiar enough with MEM to know if you have any option to use the Entity segment to further define. I’ll assume it must stay with whatever values you have now.
      • In Cost Center, look a hierarchies of reporting needs.
      • Does every department fall under only one Cost Center or can there be any 1:many relationships? If it’s 1:1, you would ideally want to number in patterns that are easy to pull out later with FRx/MR/Reporting tool of choice.
      • Example: Cost Centers may be numbered in even 100’s which are for expenses and revenues not related to a specific dept but the cost center as a whole, like executive salaries for a cost center or something.
      • Within the 100’s, would be departments within that cost center.
      • If there are further breakdowns that are important, keep those in patterns too as best you can or at least consecutive ranges. Don’t just number your departments 101, 102, 103 because there is no room to add new ones that may relate to something in between.
      • Mfg product types maybe could be accommodated but that would need some planning to see if you want to mix that with Dept/Cost Centers.
    • Generally I don’t like seeing customers mix purposes within a segment if at all possible. I don’t have an issue with Cost Centers & Depts sharing if there is a clearly defined relationship, 1:1, because that’s a natural hierarchy in my mind. Product Type is or could be quite different.

If you’re open to adding segments:

  • You can easily add segments to the end of your COA assuming your account framework handles that. (i.e. your max segments > 3). There is a product to change your framework should it need changing and it could help accommodate a new segment elsewhere vs. the 4th spot.
  • By default that would put blank spaces in all existing accounts but you could use Account Modifier (part of the PSTL free tools) to mass change all of your accounts to put 0’s in there instead)
  • I’d consider any non-cost center/dept. type purpose be put in that 4th segment perhaps to keep it clean.

Either way, think about your financial reporting first and work backwards. I find if users looked at how FRx or MR or other F/S reporting tools worked, they would have numbered their COA much differently! Seeing how you can use wildcards and ranges opens up your mind to how numbering affects the simplicity or complexity of those reports.

Hope this gives you some ideas…
Jen

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Jen Kuntz, CPA, CGA
Microsoft MVP, Business Solutions
Kuntz Consulting Inc.
Cambridge, ON, Canada
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  • Adam Warfel

    Member

    April 13, 2017 at 3:56 PM

    Sorry to jump in on this post but I’ve been meaning to reach out on this very topic…We are actually looking to overhaul our GL and some other item numbers with an eye toward reporting.  I am trying to take the reporting backwards approach that you mention.  We currently use MR.  Our account structure is 0-000-0000-000 Division-Department-Account Type-Sub Account Type.  I think this structure can work well with what we envision however the numbering will likely be quite different.  We are also looking to overhaul item numbers used in billing to rationally correspond to revenue accounts.  In general we want to make report building easier.  The current system has just become quite clunky over time.

    Does anyone have any advice for taking on a project like this?  Would it be worth starting a new Company in GP, copying some information over but building from the ground up?

    Thank you,

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    Adam Warfel
    Synergent
    Portland ME
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  • Selena Breedlove

    Member

    April 14, 2017 at 10:20 AM

    Many years ago we did a similar project.   I don’t think that setting up a new company is necessary or the optimal solution since you lose the history.   The Account Modifier/Combiner in the PSTL will convert your existing account numbers.   If you are on a previous version of Dynamics, we used the Changer module.   I recommend exporting your existing chart of accounts to excel and add cells for each new segment # on each record.  Prepare in excel – 1) you’ll have a good audit trail, 2) you’ll be able to understand the order you may need to update records in the PSTL (i.e. the old segment # on account X may be the new segment # on account Y), 3) you’ll be able to filter and copy paste the new segment #s to all the old corresponding records, 4) You can use the file data to create an import file to the PSTL and 5) excel will allow you to easily review and make changes before updating Dynamics.  With a complete overhaul you may have a few iterations.

    I hope this is helpful.

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    Selena Breedlove
    SVP of Finance/Controller
    US Assure
    Jacksonville FL
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  • Jen Kuntz

    Member

    April 18, 2017 at 1:09 PM

    Hi Adam,

    I saw this last week but forgot to jump back in the forum to respond.

    Starting a new company (in my opinion) would be the last choice but in some circumstances makes perfect sense if the changes are significant and the tools can’t get you there. I say this only because for most organizations it can be a lot of work to start again, even with the Copy Company utility.

    I’d likely recommend starting with a test company or test environment and trying samples of some of what you want to do and working through changes in a controlled manner to see if you find doing things in a certain order makes some changes easier vs. harder etc. plus testing the results and perhaps even building some of the reports based on the redesign.

    If going through a controlled testing process you find that it’s too clunky still, at that point you have solid evidence on which to put a case forward to start with a new db.

    If you have a good relationship with your VAR or a local consultant, reach out to them to get their input and advice, as we do tend to do these types of things relatively frequently and can advise on pitfalls!

    Hope that helps a bit,
    Jen

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    Jen Kuntz, CPA, CGA
    Microsoft MVP, Business Solutions
    Kuntz Consulting Inc.
    Cambridge, ON, Canada
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  • Theresa Rago

    Member

    April 19, 2017 at 11:09 AM

    I have used products from Corporate Renaissance Group, Reformatter and Changer(you could also use PSTL) to reformat my account number.  I would definitely speak to my VAR for their advice and help.  I agree with Jen in that you don’t have to create a new company to do this.  Also, I would question whether all these segments are necessary.  I have inherited a similar account structure with a sub code and division code in addition to main and department.  The departments roll up to the division but this can be done in Management Reporter without adding a segment to your a/c format.  Also, I feel that if your main segment(Account Type) is large enough you don’t need a sub code.  This just my two cents!

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    Theresa Rago
    Manager, Financial Systems
    CV Starr & Co, Inc.
    New York NY
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  • Adam Warfel

    Member

    April 19, 2017 at 5:01 PM

    Thanks for all the feedback and responses!  I was aware of the Account Modifier/Combiner feature in PSTL but just wasn’t sure if the changes we are planning would be to drastic to make this an effective option.  We wouldn’t necessarily be able to line up old account numbers into new ones. 

    I like the idea of a new Company because it represents a clean slate but certainly understand the drawbacks of that approach too.   

    I hadn’t really considered changing the account structure but maybe that is something to consider as well as creating a test company/environment to try some things out first.

    Thanks again!

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    Adam Warfel
    Synergent
    Portland ME
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