A while back I promised a series on Intacct dimensions and different ways to use them. We covered the Customer Dimension in May, now let’s venture through the world of Items.
Items is one of the tougher dimensions that is often mis-used. So let’s approach the explanation of the Item dimension through a real-world example. Imagine we work at Apple in their accounting department and our team has decided to move to Intacct. We’re working on restructuring our chart of accounts and have just been asked what we would like our items to be. (You probably think – why do we need items? What exactly are items? Especially if you’ve never thought of your company as selling “items”). Let’s say your revenue accounts look something like this:
You’ll notice right off the bat – each account represents a different revenue item. What if you could simplify your chart of accounts? What if every time you add a new product, you wouldn’t have to change your chart of accounts by adding a new account? Those Apple press conferences would be a lot less painful for you as the accountant and you could actually enjoy the cool new products those engineers are coming up with! Intacct helps with this with it’s Item dimension.
I define the Item dimension’s mission as:
The Item dimension allows you to simplify your chart of accounts, while allowing you to still track item differentiations. We leave your chart of accounts with the responsibility of managing the high level umbrella of item categories (revenue streams) and allow your items to specify actual variances of these revenue streams.
In our Apple example, your new Chart of Accounts would look like this:
Your Items would be:
Each Item is tagged with a GL group which is then tied to your GL account in the Order Entry Posting Configuration. (If using standard process workflows, it’s directly tied on the item – even easier!).
Then, in reporting you can report on these individual Revenue streams summarized, or you can expand by items showing details. Below, is a sample report which shows sales by customer expanded by items.
Also, just like the customer dimension you can add custom fields, group items, and create dimension structures with your items.
If you haven’t already heard, Intacct is all about dimensions! Hello simplified Chart of Accounts, buh bye subaccounts! It’s easy for a chart of accounts to get out of control and before you know it you have 40,000 accounts! Intacct is all about simplifying the chart by taking away all those subaccounts and tagging data through the use of dimensions. Now, that’s no secret, but the tough part is deciding how to use each dimension. If you’re thinking about switching to Intacct, that is a HUGE part of building your system. The problem is that everyone knows that they have 8 dimensions (Vendor, Customer, Employee, Department, Location, Item, Project, and Class) and that you can re-purpose some of them BUT how exactly should you go about doing that? What dimensions are best used for what? What can and can’t you do with them? How are they used in reporting? These were all questions I had! I wanted to know exactly what is possible and what’s just way out there. So this is my attempt at putting together an overview of the 8 dimensions and what can and cannot be done. Hopefully helping you decide how to use your dimensions along the way.
Before we go about repurposing all our dimensions and thinking Intacct is a magical Jeannie that will do anything we want with an “I Dream of Jeannie” knod of the head, let’s go through these dimension so we have a basic understanding of their attributes, how they can be grouped, and most importantly how that plays into reporting.
So lets jump right in with Customers – part one of our series of posts on the 8 dimension.
This week I got a chance to dive into Financial Reporting (thanks to an awesome Intacct teacher who’s enthusiasm about Intacct is contagious – she was awesome and inspired this idea!). Before going over to consulting, this was part 1 of a report I used to create in Excel and didn’t get a chance to build in Intacct’s Financial Reporting Wizard (I just didn’t have enough time to dedicate to it and to be honest I didn’t completely understand the Financial Report Wizard – it was sort of intimidating. customer groups, dimension groups, account groups, dimensions?! It was a whole new world!).
A lightbulb went off in my head during her class about how Intacct could partially automate this report. So here goes!
Have you ever wanted to create a report that would show you a snapshot of all your customer right this very second? What if you had a report that would show everything from Customer specific details (like sign up date, user quantity, sales reps, location), Item specific details (items purchased, prices, discount) and then compare month by month revenue? This type of report could be useful to get an overall picture of customer demographic and month over month revenue – what items are they buying? what is the variance month over month? when did they sign up? where are they? is there any correlation? Imagine you have thousands of customers – that’s kind of hard, right?
If you didn’t notice I listed a bunch of dimensions (and attributes) up there! And if you haven’t heard yet, well, dimensions are sort of Intacct’s thing. (Talk about simplifying your Chart of Accounts – and on top of that slicing and dicing your reports however you want!).
Here’s a little sneak peak of what the final report looks like in Intacct:
Looking at the report you’ll see immediately your customer, Kathy, increased revenue month over month by $50 compare to last month. If you look closer, you’ll see it was because she added on a faxing plan in March. Cool, right? Then you could see that the customer, Zabars, doesn’t have faxing or any other add on service, now there’s a great opportunity for an upsell, right? It’s really just a cool report to see all your customers at once and be able to analyze correlations and opportunity for marketing and growth.
So let’s go through the step by step!
It’s that time of the month again, end of the month, time to close the books and time to calculate commissions. Have you been exporting reports and calculating commissions manually in Excel? Are sales reps always waiting on you (and probably bugging you) to get those numbers? What if Intacct could automatically create those reports for you? With one click of a button you’d have all your commissions calculated in separate reports ready to be sent out to all your Sales Reps (okay maybe a few clicks – still way easier!).
Recently I created a very specific (but cool!) P&L report for exactly this reason. There were a few things the client was looking to get out of the report – two of them were:
- Calculate commission per employee (where % commission varies based on the employee).
- Separate reports based on employee.
We also wanted to be able to run a report based on a date located in the project dimension. (That was a tough one to figure out! Since Intacct only allows you to run reports based on dates of the transactions – so for example November 1 – November 30 would include all transactions for a specific project BUT what we were looking to find was all transactions for a project that started on a certain date whether the transactions occurred in November, December, January, etc. We wanted this to include all projects with a start date in a certain month. A little mind bending – I’ll let you think about that one for a bit. If you’d like help on setting that up – I can definitely give some direction!).
Back to the requirements! Separating the reports based on employee was easy. I used Intacct Dimension Groups (check out how to set those up here!). So I set up the 6 employees based on the primary contact field in the project dimension and the 6 P&L reports (easy enough). (I needed to set up 6 reports because of the time dimension requirement).
Now, back to number 1 (and where I’m getting at with this post)…. We wanted to calculate the commission on each of these reports and have the percentage vary based on the employee. That’s where Intacct Account Groups came to the rescue! Keep reading if you’d like to learn how to set up an Account Group!
Remember when I promised we would set up Dimension Structures (groups) in the Intacct: Financial Report Writer post last time? (I know you do, because it’s only been a week! But just in case you need a refresher it’s linked above.) Dimension Structures are what made that last report magically work. If you tried to re-create that report, you probably got to the dimension step and realized something was missing … these guys:
So let’s drop some Dimension Structure configuration knowledge, shall we?
A Brief Overview – What are Dimensions and Dimension Structures?
Dimensions allow you to independently tag transactions (AR invoices, AP invoices, etc) and records (customers, vendors, etc). Based on Dimensions you have set up, you can create Dimension Groups/Structures. When setting up a dimension group you define the rule (based on a tag) identifying which members are included. (Dimension Structures, which this post covers, are different than Dimensions).
When would we use Dimension Structures?
Say for example the CFO asks you to build a report that shows last month’s revenue for all customers in Washington. The Dimension, or tag, here would be the Customer’s Billing State (WA). The Dimension Group would include anyone who is tagged with Washington. You could manipulate some reports exported to Excel using vlookups and filters OR you could create a dimension group which includes Washington customers only, and create a custom financial report. Sounds easy, right? So let’s set up the dimension group!
Financial reports are the basis of vital business decisions guiding the direction and shaping the future of a company.
Imagine you are the CFO of a company. You noticed in February that revenue didn’t go up as much as sales did. The sales numbers show that new sales were $200,000 monthly, while revenue only increased by $150,000. With these new customers being added, revenue should surely go up by $200,000. That’s the logical conclusion, right? But what if there’s something happening that you don’t see? What if you’re not accounting for cancelations or free months that a sales representative gave a customer to allow them to get on their feet initially. Or maybe customers are dropping products. All of these are possibilities. The hard thing about being a CFO (or any type of manager) is as much as you’d like to be aware of everything that’s happening in the company – it’s impossible amongst all your other responsibilities. So you decide you’d like to have a report that compares customer revenue month by month and identifies variances. That way you’ll be able to see (from a top level) if customers are dropping products, canceling, or receiving free months; thereby allowing you to identify the cause and solve the problem before it’s too late! *Cue Intacct Financial Report Writer*
The Financial Report Writer can also be used to create custom balance sheets, income statements, etc (if you need something different than the stock reports Intacct provides). This example will give you a good overview of the steps and various functions of the report writer at a basic level. Then, in future posts I’ll go over how to set up dimensions and account groups. (This can be a little tricky but easy if you know where to go.)
Now that I’ve built up a bit of anticipation, let’s get started!