How Did We Manage Before Sage X3 Financials?

How Did We Manage Before Sage X3 Financials?

In the beginning there was the chart of accounts and it was very long and complex. No one had meant for it to become so complex - it had just "kind of happened"…

If you are from the finance community, then you might have read the above paragraph with a shudder.

As it recalls the pain involved in adding almost a full chart of accounts all over again every time a new division or cost centre needed to be added. Then, if a particular low level account ended up not being used, you still had an extended list of accounts cluttering up your trial balance.

But things are different now…

With Sage X3 you can now set up a single set of accounts and use analytical dimensions to provide the extra granularity that you need.  A dimension is simply a way to analyse a monetary or unit-based value.  For example, if I'm posting a phone bill to a telephone account in my P&L and want to split the cost among a number of departments, then I can define one set of dimension types to be "Departments" and do one of two things:
  • Either itemise my postings by department, if I know the detailed breakdown, or
  • Use a distribution to get the system to apportion my costs based on some pre-agreed formula, like headcount, number of phones, or even based on another number somewhere else, like sales.
In both cases I'm using just one telephone account in my general ledger and X3 will then allow me to view my posting either as a single line item, or broken down by department. 

When it comes to reporting, I can look at my telephone costs as a whole and/or how those costs affect the P&L for each department.  If I'm also using dimensions across multiple companies or sites then you can see quite quickly how powerful this becomes. Commonly-used dimensions, such as cost centres, departments, markets, channels and many, many more (depending on what you need) can be used to view the same data from many different angles.

In terms of the accounts themselves, the chart of accounts, together with its associated dimension types, together form what is called a ledger. You are able to have multiple ledgers within an account core model, with mappings from accounts in one ledger to those in another; so if you have one set of accounts for management reporting and another for group reporting, then X3 can seamlessly ensure that everything is kept in sync. 

It will also be a comfort to know that you can use a particular account core model across all of the companies within your instance of Sage X3, so if you need a new account or new dimension value then you only need to set them up once.

Finally, you can group accounts or dimensions in X3 for the purposes of reporting, so that you can provide reporting at different levels - a classic example of this might be individual accounts making up an overall total for "Salaries", or different market dimensions which might together form a "Region" for analysis.  Here we can use pyramids, which are a flexible way of grouping accounts and/or dimensions into multiple reporting levels.

This flexible way of structuring your reporting means that there are many different ways in which you can set up your systems, but at Mysoft our experienced team of X3 professionals work with you to ensure that your financial records and data are structured in the best way possible, both to cater for the present day and with an eye to future expansion.

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Paul Mincer

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