If you want to easily track the profitability of each department, branch, project or just about any other aspect of your organization, you've been out of luck...until now with dimensional chart of accounts.
The dimensions capability within modern accounting software solutions (aka multi-dimensional accounting) now allows you to track revenues, expenses and profitability for any department, location, customer, vendor, employee, item, class and project while also simplifying your chart of accounts — from setup through real-time reporting. With this flexible financial foundation, you'll gain insights that speed decision-making.
Most accounting software applications use a hard-coded structure for your chart of accounts. For example, to track three departments, five projects and five customers, you'd need 75 account code combinations — and you'd end up with a complicated, unmanageable set of codes. Adding new ones could also force you to add hundreds of additional accounts on top of that.
With an accounting software solution that uses a dimensional chart of accounts, this becomes simplified. You only need to set up your primary account codes, and there's never a need to add hard-coded segment combinations. With Sage Intacct, for example, you get seven standard dimensions with the Core Financial Management solution and up to five additional standard dimensions with various ancillary modules. That provides a total of twelve standard dimensions out-of-the-box. However, you can add an unlimited number of user-defined dimensions. Once created, you can use dimensions for any transaction — general ledger, receivables, payables, purchasing, time entry, expense entry, fixed assets and more.
Using dimensions fundamentally improves reporting, making it easier for you to get answers fast, and it's simple to view performance from any dimension. As you create reports, simply use drop-down lists to filter, group and organize your data by dimensions. For example, you can go from a standard income statement to profitability by project or revenue by geography with a few clicks of the mouse.
As you look to modernize your technology stack, which might include your accounting software platform, consider using dimensions versus a standard linear chart of accounts so you can empower your team with real-time information and enable your business leaders to make informed decisions quickly.
To learn more about dimensional chart of accounts, watch this short video about dimensional chart of accounts or contact our experts for more information.
