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I am going to restructure my GL and I was hoping someone could provide a good example of a GL account mask for a manufacturing department.

Our current map is set at CC-DDD-PPP-AAAAA where C is company code, D is department, P is product line, and A is GL account. We have the opportunity to completely restructure our mapping and I have not worked in a manufacturing environment in previous position. I hope that a seasoned controller in manufacturing can provide some good examples of their software mappings.

Answers

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

We have a similar mapping as you described, except we do not include product code in the G/L. I have been in businesses where we used the G/L as a costing system, but this is not recommended. Ideally, the product information will reside in your sub system. If not, you may make decisions that require using your G/L with more of a costing view, which may cause you to ruin your G/L set up and get inappropriate financial groupings. I say ruin as often costing setup will be in conflict with a G/L setup.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon,

Patrick makes some great observations re the use of the GL. It's not clear which ERP system you are using, and I say that because much of the solution may depend on how it is designed (e.g. architecture of the data and functions) and what your organization actually uses (e.g. which functionality/modules).

Sometimes questions like the one you raise may be answered more by looking at all your needs on transaction entry, reporting and analysis than simply re-mapping your chart of accounts. I always remember someone telling me that GL means GENERAL ledger, not DETAIL ledger. So the GL doesn't have to have ALL the answers.

I'd consider this question as part of your quest for an answer:
Do you have a reporting/analytical capability attached to your ERP system that can enable you to:
-manage GL transactions the way you want (without a large, onerous chart of accounts) and
-manage customer/vendor/order/product information that way you want (that is nothing more than another, multi-dimensional way of looking at your GL data)?

If you can do that, you may be able to combine financial and non-financial data in a way that really exploits your ERP.

By the way, if remapping your chart of accounts is the answer, what is the real question?

Hope that helps!

Len

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I agree with Len. The smaller the number of accounts, the more accuracy you will ultimately have in a macro environment (which translates to the I/S and B/S).

To complex a G/L structure and you exacerbate the error rate and that translates into more time auditing (both internally and externally) which means higher accounting costs.

Most management reports should reside in the modules, not for the G/L.

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