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Accounts Format Setup

Posted on by 55

I am trying to consolidate expenditure management and revenue management functionality from different systems into GP. I would like advice on how to set up the Account Format. Both the expenditure system and revenue system produce reports by Fund and Sub Fund. The revenue system identifies accounts by Fee Type(4 digits) while the expenditures system identifies accounts by Program Index(5 digits). There are overlapping accounts but there are also accounts that are only used in either revenue or expenditure.

Should I include both the Fee Type and Program Index as separate segments in the Account Format setup? Should the account format look like this:

  • Segment 1 = Fund
  • Segment 2 = Sub Fund
  • Segment 3 = Program Index
  • Segment 4 = Fee Type

  • Suggested answer
    Mahmoud Saadi Profile Picture
    Mahmoud Saadi 32,736 on at
    RE: Accounts Format Setup

    Well, different people have different methods when it comes to designing the chart of accounts. Although, there is no doubt that adding Analytical Accounitng as an additional layer on your general ledger will add up more complexity not only on the reporting level, but additionally on the transaction entry level. 

    It is a matter of Pros and Cons, considering AA will shorten your COA but add more complexity to your COA. Meanwhile, considering traditional GL segmentation would result with a long COA if not well designed. 

    I would personally; as always, go with the GL traditional segmentation to get rid of the complexity of AA, especially that it will add up many more tasks when it comes to budgeting and Management Reporter financial statements. Therefore, you may go with the first option of traditional GL segmentation.

    Back to your question, "Do you recommend fewer segments but greater lengths within the segments? What would be the benefits of setting up COA with this approach?

    There is no reason at all to have fewer account segments by "to simplify" transaction entry. Since you will have the same value with two segments or four. Although, some may prefer to create four segments as you proposed, but I won't go with the choice.

    Finally, in case you are new to GP, I would highly recommend discussing this topic with your GP Partner as it is a core phase when it comes to implementation. 

    Please feel free to verify the answer in case it fulfills your inquiries,   

  • Vichet Hoy Profile Picture
    Vichet Hoy 55 on at
    RE: Accounts Format Setup

    Thank you. I'm new to GP and trying to understand...

    Do you recommend fewer segments but greater lengths within the segments? What would be the benefits of setting up COA with this approach? Is it for easier transaction entry? It seems to me this would add complexity to reporting.

    Vichet

  • Suggested answer
    Mahmoud Saadi Profile Picture
    Mahmoud Saadi 32,736 on at
    RE: Accounts Format Setup

    I would personally suggest one of two options, both of them would not require four segments to be configured on your COA. The first option is consider the traditional GL account segmentation while the second would consider the Analytical Accounting as an additional dimensional analysis. 

    Traditional General Ledger Segmentation

    I would consider one segment for both fun and sub fund, you can manage to cover this by ranges. The number of digits should ensure to cover the business continuity and expansions. For instance, Five digits would divided among two sections (3 digits for Primary Fund) (2 digits for sub fund). This means that you COA will cover up to 999 funds, with 99 sub fund for each. The GAP analysis shall give you the answer on whether this is comprehensive or not

    Another segment consisting of five digits should manage to cover the program index and Fee type. 

    General Ledger with Analytical Accounting Dimensions


    You can consider opening only one segment to cover the Main funds and sub funds as mentioned above. While the Analytical Accounting dimensions should cover the program index and fee type. You can open two dimensions, one is Program Index and the other one is Fee Type.

    Each dimension can have as many dimension codes (sub values) as needed to cover the business requirements. These dimensions are to be linked o the primary GL accounts.

    There is a similar topic that has been discussed on the forum few days ago, it has thorough explanation on the COA in terms of GL and Analytical Accounting with specific details. You may refer to it on Designing Chart of Accounts with Analytical Accounting

    Your feedback is highly appreciated, 

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