A collection of general ledger accounts (GLAs), entities and analysis dimensions organized into a reporting structure is known as a chart of accounts. See the list of related topics for more information.
A chart of accounts can be tailored to meet an individual organization’s needs in order to support decision making. The best way to decide upon the structure is to first consider the reports you will need to prepare for management purposes to support decision making and also for statutory reporting purposes.
For example, if you have more than one branch, do you want to keep track of information separately for each branch? Or, if you have several projects, do you want to keep track of the costs for each project separately? These could be represented by custom analysis dimensions.
You must consider the level of detail that is required. For example, if you need to know how much you spend on postage, stationery and telephone charges at each branch, you will need a separate general ledger account for each one.
You must also consider the ability of the organization to accurately capture and enter the data that will be needed to achieve the required level of analysis. For example, if you have 50 branches and 100 projects, and you want to sub-analyze all of your invoices by branch and project, the sales invoicing clerk will need to have access to this information for each invoice, and they will need to key it accurately into the invoice page.