By Johan Smith - 6 Aug 2022
Do you have multiple "dimensions" in your business (e.g. departments, locations, cost centers, product groups, sales channels etc) but are you unable to record these transactions properly in your accounting system?
Most accounting systems offer only up to 2 fields to "track" specifications of revenue and expense transactions. Examples are "department" and "location" in Quickbooks, or "tracking categories" in Xero. Other systems may only offer just 1 segment, such as "department".
But what are your options you want to track more than 2 segments? This is where XLReporting comes to the rescue thanks its powerful features in importing and classifying data.
Here are some alternative solutions you can use:
If the revenue (or expense) specifications are related to customers or projects, you might be able to record your transactions accordingly. In XLReporting you can define classifications on customers and projects, enabling you to build really flexible reports. Basically, the mapping in XLReporting will augment the recorded transactions in your accounting system.
For revenue (or expense) specifications that are not related to customers or projects, you could follow another approach: create multiple accounts with a suffix that indicates the specification. For example, let's say we want to track "Marketing costs" across 3 different channels: offline, PPC, and social media.
So instead of one account (say) "43000 Marketing costs", you create 3 accounts:
When XLReporting imports the date from your accounting system, it will separate the 2 parts and record them separately, giving you accounts (e.g. 43000) and channels (e.g. 1, 2, and 3) which you can use independently in your reports. In XLReporting you can define classifications on these channels, so you augment your reports.
Once you imported the data from your accounting system, you can create a relevant classification and aggregation (grouping) in XLReporting. In above example, you will be able to report and filter your marketing expenses by channels. Other examples are to divide your customers into customer groups, or to group customers by country. How cool is it if your reports can roll up to customer groups, and you can drill down into individual customers?
Below is an example chart of accounts, in which each account rolls up to a Class. Now you can run reports on an aggregated level, whilst also drill down into individual account level:
For optimal reporting, you need to find the dimensions in your business, create a relevant classification, and find a way to record the transactions in your accounting system accordingly. And most importantly, use a powerful reporting platform such as XLReporting to give you insights into your business.← Back to articles
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