This webinar speed read offers a simple strategy for harnessing the power of analytical accounting in Microsoft Dynamics GP.
Originally published in H1 2018 GPUG Magazine
Within the world of Microsoft Dynamics GP, there is a hidden jungle of dimensions, nodes, and trees in a place called analytical accounting. Few dare venture into this mysterious realm, and most don’t even know that it exists. I hope to clear the fog and show you a very simple strategy in which you can harness the power of analytical accounting (AA) without getting swamped within the more complex terminology.
The easiest way to understand AA is to just think about it as additional segments to your general ledger (GL) account structure. Your account structure has at least one segment for the natural account number and probably a couple more to code transactions by department, line of business, or region. But what if you want to code more detail for specific transactions? For example, maybe you would like to track the cost of some special events during the year, like tradeshows or conventions. Or maybe you’d like to track revenue and costs on certain projects, but you don’t want to have to use a full-blown project accounting system. Do you have to expand your GL account structure and create new GL codes for every event or project? If you did, your GL structure would soon become very swollen and complex and make basic day-to-day coding very tedious.
So, the best practice is to keep your GL account structure as simple as possible and then use AA to add what I call “virtual segments” for any other reporting needs.
Here are a few other examples of how I have seen AA used:
- To track cell phone bills by employee;
- To track maintenance costs by vehicle;
- To track advertising expenses by media outlet;
- To track extraordinary expenses to be able to present “recast financials” when valuing the company for acquisition.
So, how can you easily implement AA? Use this link to watch a step-by-step demonstration: https://www.gpug.com/viewdocument/analytical-accounting-made-easy?CommunityKey=f5effb5c-1971-4d11-af16-0817422d8c8d&tab=librarydocuments
The most important takeaway from this demonstration is that you can use the same reporting tools, such as SmartList and Management Reporter (MR), with which you already have experience, to leverage the power of AA. While there are many reporting features within AA, I have found that most companies would rather use the reporting tools they use and know instead of reinventing the wheel.
Once you have activated AA for Management Reporter, MR will automatically pull in all your AA dimensions and codes. You can add AA dimensions and codes within the rows, columns, or trees, just like you already do with your existing GL segments. This shows exactly how AA is like a “virtual segment” that can be used for any financial reporting need you may have. So, open your eyes to a new world, and see how analytical accounting can give you incredible reporting flexibility.