A dimensional chart of accounts is an underlying structure used to capture transactions and organize them into your assets, liabilities, .
Many companies use a hard-coated chart of accounts, which has a potential to result in a monster chart of accounts. For example, let’s say you want to attach a main account to three locations, five departments and five projects, this would result in 75 additional accounts. This also has the potential to lead to incorrect account usage and subsequent re-class entries. The more accounts there are to choose from, the more opportunity there is for a user to select the wrong account, or fat-finger an account, when they’re entering a transaction.
Dimensional chart of accounts can be difficult to maintain, if you want to add a new department or a new project to your chart of accounts, this could result in hundreds of accounts that need to be added. A longer review process can result in higher audit costs. And complex mapping to financial statements.
The good news is there are opportunities out there for companies that do have a monster chart of accounts. Moving to an , which supports dimensional chart of accounts, can significantly reduce the number of accounts to manage. In addition, it can preserve the ability to continue to report on department, project, location, as well as reduce the number of transaction errors.
of Intacct financial management software in the cloud to learn more.
by Cory Hastings, The Resource Group
