Businesses will always have a need to “slice and dice” their accounting and management information in different ways. Owners and managers might want to see information about revenue by customer, certain expenses by project or vendor, billable hours by employee, etc. Traditional accounting systems for small and medium-sized companies, like Quickbooks and Microsoft Dynamics GP (formerly Great Plains) rely primarily on the chart of accounts structure to create these different dimensions for reporting purposes.
For example, if you have a general ledger account for revenue, and you want to report on revenue by product or service line, you would normally have to create a revenue account for each product or service line. So if you have 3 product lines, you would need 3 revenue accounts instead of one. As you can imagine, this can lead to a very bloated and confusing chart of accounts.
Modern day accounting applications like Intacct provide additional reporting dimensions, separate from the general ledger accounts, to segregate the information as needed. For example, when coding an expense to the appropriate general ledger account, you could also code it to a project, department, location or multiple other dimensions. These are separate fields from the general ledger account. This enables the chart of accounts to stay lean and focused on the “natural” account categories, and provides the ability to create very powerful reports.
So take your accounting system to another dimension. Upgrade your system to a modern accounting application like Intacct, and realize the power of multi-dimensional accounting and reporting capabilities.