Intacct Dimensions are said to be useful in simplifying your Chart of Accounts, but how exactly is that accomplished? In the past, account numbers incorporated a hierarchical structure in order to allow financial reports to be prepared for specific portions of the organization. Account numbers were comprised of multiple segments according to the needs of the financial statement users. For example, if the company wished to track Department and Locations then the full account numbers might be comprised of 3 segments as shown below:
This scenario may seem simple enough but in an organization with many departments and many locations the Chart of Accounts quickly becomes very long and locating the account number you require can become tedious.
For example a business might have 3 departments and 3 separate locations as follows:
|000 – Consulting
001 – Sales
002 – Marketing
|01 – Houston
02 – Chicago
03 – Boston
In this scenario each account in the Chart of Accounts would require 9 full accounts to accommodate all of the possible department and location combinations. For example, if Account Number 1500 were the Equipment account we would have the following 9 accounts to represent all the possible combinations:
1500-000-01 Equipment – Consulting – Houston
1500-000-02 Equipment – Consulting – Chicago
1500-000-03 Equipment – Consulting – Boston
1500-001-01 Equipment – Sales – Houston
1500-001-02 Equipment – Sales – Chicago
1500-001-03 Equipment – Sales – Boston
1500-002-01 Equipment – Marketing – Houston
1500-002-02 Equipment – Marketing – Chicago
1500-002-03 Equipment – Marketing – Boston
Now imagine having 50 accounts in this company comprising of 3 Departments and 3 Locations, that’s 450 full account numbers! The act of coding invoices would be quite cumbersome as you will be required to sift through 450 account numbers to find the correct one.
Through the use of Dimensions in Intacct you can do away with the multi segmented account numbers and shrink the Chart of Accounts from 450 accounts down to 50. Instead of storing the Department and Location information within the account numbers themselves, we will store them separately, simplifying the Chart of Accounts. The below image shows you how Intacct splits the old segments into different dimensions.
A more simple, more streamlined Chart of Accounts means less errors and faster coding!