5 ways that dimensional reporting will revamp your General Ledger

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Business leaders require the right data to make informed decisions and steer their companies in the right direction.

By implementing dimensional accounting, accounting practices can help business leaders and decision-makers by providing an accurate and complete view of their company’s performance.

Not only is this great for diversifying your offering as an accountant, you’ll also add significant value for clients and give yourself a competitive advantage in an ever-changing market

What is dimensional accounting?

Dimensional accounting is a method for classifying transactional data into common dimensions, allowing for a more thorough and accurate evaluation of results. 

Dimensional reporting is becoming a popular way for accountants to avoid using complex account codes in their General Ledger, in order to interrogate their financial data, and instead use easy category tagging.

How can dimensional accounting simplify Chart of Accounts?

A linear Chart of Accounts is restricted in the reporting options it offers. Instead of becoming lost in a sea of accounts, accountants can have a master account view filtered by dimensions. 

In the traditional Chart of Accounts structure, if you wanted to track three departments (each managing four projects and four customers, for example), you'd need 48 account code combinations.

That’s for a very small amount of personnel and projects. For any larger company, the General Ledger can easily become unmanageable and with this, errors can be made.

Instead of having to set up a new account each time, dimensional reporting will allow you to simply have primary business accounts and then create reports to define dimensions such as location or project, receivables, payables, purchasing - and whatever else is relevant to your business.

How can dimensional reporting drive efficiencies and help to gain better business insights?

1. Reduces the amount of accounts needed in the General Ledger

This reduces the possibility of errors and the costs associated with a complex Chart of Accounts structure, as adding a new dimension or dimension value is instant - and you can have unlimited dimension values in the KeyPay platform. 

2. Saves time

As the number of accounts grows in a linear Chart of Accounts system, it becomes more time-consuming to correct journal errors and produce financial statements to analyse. Dimensional reports are instant and easy. 

3. Makes navigation easier

By using a descriptive name (such as location, venue, employee expenses, and more), rather than account numbers and codes, this makes your accounts so much easier to navigate.

4. Allows for profitability and expense tracking of each dimension 

This can be whatever you have set the value to be - location, customer, project or vendor, for example. This is done by isolating activity for each revenue source to create a series of specific reports with unique requirements. The improved reporting works with operational and financial data. 

5. Improves reporting

Quick decisions can be made to check dimension values against each other, providing data that you would not have previously been able to access. 

Dimensions functionality in KeyPay

We’ve introduced dimensions in the KeyPay platform to complement the existing method of sending payroll data to your accounting software.

You can have unlimited dimension values. A dimension value is the sub-category that sits under the dimension, and is the function used for tagging and meaningful data analysis.

For example a dimension might be “Location”, but the dimension value would be “Sydney office”.

An example of detailed dimensional reporting in KeyPay.

How might dimensions be used?

Many of our partners have clients with businesses based on trade, where they want to cost according to specific clients or jobs.

Previously in KeyPay, you would have to create a location for each of these to then be able to split wages to those specific clients or jobs.

With dimensions, you no longer have to do this. All earnings can be assigned to a location, and dimensions can be created within those locations to provide different values of clients or jobs.

Management of locations is now much more efficient - hello time savings and increased efficiencies!

Learn more about dimensional reporting in KeyPay

How you use dimensions within our platform varies according to your journal service. This is a solution that, once implemented, will give you a deeper understanding of your clients’ businesses.

This will provide significant value for your clients, allow you to diversify your product offerings and services against a competitive market, and will save time for both your team and your clients.

Read more about dimensional reporting* here: AU | NZ | UK | SG | MY 

* Dimensional reporting functionality is available to existing KeyPay partners on the Plus plan. Partners can feed dimensions data directly from payroll into their accounting platform via file export and/or detailed file export. We also have a seamless integration available with Microsoft Dynamics 365 Business Central in Australia, New Zealand, the UK, Singapore and Malaysia.

Pippa Bennett

Technical Content Writer

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