Advanced Nominal Ledger
Related topics: CoA Intro, Coa Build, Build, Detail
This system enables you to create your own chart of accounts using segmented or cost centre coding.
ANL Configuration has now been split into Setup and Data Entry. This enhancement allows you to move your existing data, including historical data, into the Advanced configuration.
ANL is the default option when building new databases, but it can also be configured for Standard Chart of Accounts users. ANL setup is done while normal processing continues; only when 'Begin transaction entry' is enabled, all users are out of the system, and historical balances have been merged using Corrections will the ANL structure come into use. A How To topic is available for setting up ANL.
Contents |
Advantages |
Planning |
Code limitations |
Naming |
Example
This simple example will be used to illustrate the use of segmented account codes throughout the Help.
The Company
The company supplies and fits both off-the-shelf and custom build furniture.
It has three branches with shops and warehouses and a Head Office from which the central accounting function is run.
The Nominal Ledger account codes
Each code consists of predefined segments, each segment relates to a different part of the company structure.
Segment 1 identifies the Branch
Segment 2 identifies the Department (shop, warehouse, office)
Segment 3 identifies the Product type (stock item, non-stock item, fitting).
Segment 4 records the detail of the income or cost (sales, purchases, electricity, rent).
Thus the code MART-WARE-OVHD-ELEC can quickly be identified as electricity (ELEC) overheads (OVHD) for the warehouse (WARE) at the Martlesham (MART) Branch and the code WOOD-SHOP-SALE-STCK as sales (SALE) of stock (STCK) from the shop (SHOP) in Woodbridge (WOOD)
Advantages
Identification
As seen from the simple example above, segmented codes can be easily interpreted and therefore identified.
Ease of use
Selection of the correct code when entering transactions is made easier.
Pre-selection of part of the code by setting Category Defaults can simplify this still further.
Less to remember, less chance of mistakes.
Flexibility when creating the Chart of Accounts and subsequent nominal records by specifying the analysis records to create at the same time.
Flexible reporting
Enquiries and reports can be grouped by the segments of the code providing very flexible reporting options.
For the example above, it will be possible to report on Sales of each Product grouping by Branch or Department at the highest or lowest level.
Extendable
If an additional Department is added to a Branch, you will be able to quickly duplicate the nominal structure from an existing Department ensuring that all the necessary accounts are created.
Planning
Once you have understood the concept of segmented codes, you will need to work out how best to split your company structure to fit these segments and meet your reporting requirements.
It may help to think of the segments of layers in your structure:
Department, Finance Code, Function Code,
Company, Cost Centre, Activity, Analysis,
Organisation, Department, Cost Centre, Source, Transaction.
Categories
When you select Categories, you will see that there are 8 categories available (4 for Dimensions Lite).
These categories are the records for the segments of your Nominal Codes.
Each segment will be a Category record, the values for each segment being the values contained in the category.
It is not necessary to use them in numerical order as you can define an hierarchy in the System Control settings, but with good planning you will probably find that this is the instinctive method to use.
Detail segment
One of the segments will be designated to be the detail segment.
This identifies the income or cost that is recorded in the nominal ledger account.
In our example, this is Segment 4.
Hierarchy
When you enter your system settings for the Nominal Ledger you will have the opportunity to set two different hierarchies for the categories.
The first is used for setup and reporting purposes.
This hierarchical structure will be used in the Chart of Accounts builder to provide a simple logical grouping.
Remember, there is a copy structure option to help you to build the chart of accounts quickly, so you will be able to copy large parts of the structure if they are grouped logically.
Whenever you open a Nominal Ledger Summary window, the values will be grouped according to the setup/reporting hierarchy.
The second defines the order of the fields for data entry.
This will enable you to make it as easy as possible for your staff to selected the correct Nominal Ledger code as quickly as possible.
Before you start to build your chart of accounts, you can select which order will be used when your Nominal Ledger codes are created.
However, once you have started building your chart of accounts you will not be able to change this selection.
Considerations when planning
Code limitations:
There are a maximum of 8 segments available for use.
The resulting Nominal codes can be a maximum of 25 characters but this includes the currency identifier, which is added to the end of the code, example MART-WARE-OVHD-ELECEUR.
Note: The currency code is not included for Home currency Nominal codes. It is only for currency nominal codes other than home currency.
This means that only 22 characters are available including the separator, if used; therefore, you must consider whether or not to use a separator when planning your codes.
A separator is not required but does make the codes easier to read. The choices are <None>, - (hyphen), / (slash) or Space.
Nominal Ledger account - Codes and Names:
An understanding of how the Nominal Ledger account codes and names will be created will help you to decide whether to use numeric or character codes and how best to utilise the short name.
When the Nominal Ledger accounts are built,
their account codes will be made up from the Category Codes and the currency identifier, with a separator if one has been selected in the System Control settings. e.g. MART-WARE-OVHD-ELECEUR
the account name will be made up from the Short Names, also with the separator. e.g. Mart-Warehouse-OverHd-Elec
If the Short Name is empty, the account name will omit that segment of the name (unless it is the Detail Segment). e.g. no Short name for OVHD: Mart-Warehouse-Elec
the Name field from the Detail Segment will be used if the short name is empty. e.g. no Short name for OVHD or ELEC (ELEC is the detail segment): Mart-Warehouse-Electricity Charges
Set up used for these examples:
Our code MART-WARE-OVHD-ELEC uses the codes from the following records:
Code | Name | Short Name |
MART | Martlesham | Mart |
WARE | Warehouse | Warehouse |
OVHD | Overhead | OverHd |
ELEC | Electricity Charges | Elec |
For our example in the Help topics, as we are using characters for our codes and have previously defined the Nominal Ledger account MART-WARE-OVHD-ELEC, we will not use the Short Name field.