"For every minute spent in organizing, an hour is earned." - Benjamin Franklin
Leaders are under a lot of pressure to make smart decisions fast because the effects of making a “bad” decision can cause permanent damage to an organization. A big reason for making poor decisions often stems from inaccurate insights, fragmented data, or just plain old confusion. This means it’s not inherently any decision-maker's fault (this is reassuring). They’re just trying to make the best decision based on the information (or lack thereof) they have at hand.
That makes it easy to understand how data is now the single most important asset to a business, however only when it’s organized appropriately and understood by users. That’s why you’re going to want to hear about dimensional accounting.
Dimensional accounting, or accounting categories as it’s sometimes referred to, is a highly valuable functionality that allows users to ‘tag’ transactions and operational data using dimensional values. This is a similar tool to what QuickBooks and other financial systems call ‘class’ or ‘category’. The difference with Sage Intacct’s dimensional accounting is it’s one level up because of the control and flexible foundation it also offers its users.
Time is valuable, particularly in the business world. The potential costs of ineffective decision-making are staggering. On average, people spend 37% of their time making decisions with more than half of this time thought to be spent ineffectively. Boiled down, dimensions increase efficiency, and save time by classifying, organizing, sorting, and reporting data allowing for increased control and visibility across the organization. All of which results in quicker and smarter decision-making.
In an organization, everyone uses the same data. Depending on the business’s structure, you could have multi entities and multiple locations scattered around the globe, which can be hard to manage financially and operationally. Keeping accurate records begins to get complex at this point. You likely will have many departments which keep track of expenses differently, for example, by department or on a per-location basis.
Accounting categories or dimensions allow you to easily add context to your convoluted data. You can simplify your chart of accounts, get a detailed level of analysis, provide customized reporting tailored to specific business activities, and easily build hierarchies and reporting groups. Let’s dive deeper into the four key benefits of dimensional accounting benefits.
“Our chart of accounts setup is much cleaner and posting accounting activity is simpler and much less time-consuming,” says Robert Berman, CFO for CASA/LA. Without dimensional accounting, you must create a separate chart of accounts for each transaction creating a lot of unnecessary work that can get convoluted. However, with Sage Intacct’s dimensions, you can tag transactional data so you don’t have to create segmented general ledger accounts. You have your main chart of accounts and can also tag the operational data underneath it. This tagged operational data can then be filtered out in a variety of ways and sliced and diced however you need to get the answers you’re looking for.
Built-in reports aren’t overly helpful in running your business better because they’re not tailored to your business. Using dimensions in Sage Intacct lets you create interactive and customized reports you can immediately act on. Choose what dimensions & metrics you want to include, while also choosing which ones to ignore so you can capture your unique business activities and drive real-time decisions. This allows you to view your data in any way you like, so you easily monitor and analyze the financial health of your organization.
There is a third way to organize your data using Sage Intacct’s dimensional reporting: by building custom hierarchies. With hierarchies, for example, you can have one main parent office and place its children or sub-offices underneath it. Using the dimensional hierarchy tool allows you to tag top-level locations, making traceability of costs and services much simpler and offering better monitoring for various levels or subgroups.
Additionally, Sage Intacct’s reporting groups allow you to view and print multiple reports into one unified, and clear report. Instead of searching through multiple reports, and trying to analyze and decipher the disconnected data, you can combine everything into one meaningful report and share it with your team for swift action. Dimension hierarchies and reporting groups are key to building structure and organization in your data.
As decision-makers, we can relate to the worry that sometimes comes with the role. Everyone in an organization is riding on you to steer the ship in the right direction. One wrong turn and the organization maneuvers off course making it hard to get back on the right track, if at all. Just like a captain can’t navigate a ship on their own, we can’t do everything on our own.
That’s why Sage Intacct has incorporated effective and practical dimensional accounting categories we can benefit from in our day-to-day work. If you have questions about how Sage Intacct can make accounting fun again, talk to our team. Great leaders are great decision-makers and Sage Intacct helps us get there.