A concept I had to wrap my head around when our firm started working with Intacct was how the program uses Intacct Dimensions to classify financial transactions. What are Intacct Dimensions and why was everyone talking about them? Are they just a variation on the theme of custom fields, or has Intacct introduced something that really makes a difference?
Intacct Dimensions simplify the development of a Chart of Accounts while enabling Intacct's Flex Reporting engine to create meaningful and accurate reports. I "tag" transactions at data entry time with one or more of these Intacct Dimensions. As a manager using Intacct's Flex Reporting, I can use the General Ledger as the primary source for all sorts of analytical reports to help me run my business. I never worry about how or if these reports tie to the General Ledger, because they are sourced from General Ledger data. Intacct Flex Reporting deserves a series of blog articles on its own, but I love creating management reports or dashboards on auditable and real-time transaction data without having to use an external tool that probably relies on some variation of Excel's pivot table capabilities.
How do Intacct Dimensions simplify the development of a Chart of Accounts? In the old days, I constructed my accounts with segments representing my business' cost centers. For instance, if I had offices in Dallas, Chicago, and Atlanta, I created an account structure with a segment for Location and populated that segment with the names of my cities. If I had 50 revenue and expense accounts, then my Chart of Accounts included 150 accounts to accommodate all of the possible account and location combinations (50 accounts * 3 locations). With Intacct Dimensions, I only need 50 accounts instead of 150 because I have a table of 3 location Dimensions representing my 3 cities. As I enter transactions, I tag transactions with any account and location combination I choose, which helps me accomplish with 50 accounts what traditionally requires 150 accounts.
Now, let's say I decide to keep track of my revenue and expenses not only by location, but also by the 5 products in my portfolio. Traditionally, I add a segment to my Chart of Accounts for product and then 750 account-location-product accounts for every possible combination (50 accounts * 3 locations * 5 products). The addition of 750 accounts to my Chart of Accounts takes some time, and there will be other future costs related to analyzing, printing, and finding accounts. With Intacct Dimensions, I only have to add 5 records to my Product Dimension table, and I am ready to go!
But wait! There's more! Let's say I want to now report on how each of my 10 salespeople are doing by product by location. In fact, I'd love to have an Income Statement by salesperson. This requires 7,500 accounts using a traditional Chart of Accounts (50 accounts * 3 locations * 5 products * 10 salespeople). My effort includes not only setting up the Chart of Accounts but also working with a database of this considerable size now and in the future. With Intacct Dimensions, I need only add 10 records to my Salesperson Dimension table, and I am ready to go. Later, when I add two new salespeople, I add 2 more records to this table instead of another 1,500 records using a traditional General Ledger (50 accounts * 3 locations * 5 products * 2 salespeople). Accounting life is much easier!
This type of managerial reporting might traditionally occur from a CRM or Order Entry system. Immediately upon seeing reports from subsystems, I naturally suspect that information until someone ties it back to the General Ledger. Using Intacct Dimensions, the reports always tie to the General Ledger because the General Ledger provides the data for the reports.
Intacct Dimensions give a major advantage to Intacct client companies by simplifying the Chart of Accounts. Combined with Intacct Flex Reporting, Intacct client companies benefit by a smaller, more stable and more understandable Chart of Accounts without sacrificing financial and management reporting needs. To learn more about the power of Intacct Dimensions, please request a free 30 minute consultation or sign up for an upcoming informational webinar.