Changing General Ledger Charts of Accounts
Posted on: December 20, 2017 | By: Andy Vitullo | QAD Financials
Changing your Chart of Accounts
Companies involved in ERP implementation projects need to consider refreshing, augmenting or changing their charts of accounts. This consideration is the result of changing business conditions, enhanced functionality from modern ERP systems, as well as, the desire to drive efficiency into the business by fine tuning this critical master data element.
A properly designed chart will support a strong financial reporting systems. A poorly designed chart will burden the reporting environment and drive inefficiencies.
Below are some considerations to the chart of account structure including natural accounts and cost centers that will impact the design:
· Are department managers properly informed on their budgets and actual spends?
· What is the enterprise cost of running the sales department?
· What are the local cost of running individual sales offices?
· What is the overtime cost for the second quarter for operations?
Understanding your company’s key business metrics will impact the structure of the chart. Finally, any design should be properly structured hierarchically, properly trained to both the finance and accounting teams, as well as, any organization that impacts the collection and accuracy of transactions.