The General Ledger is the foundation of the financial system that stores and organises the financial transactional data that is subsequently used as the source data to create the key financial statements e.g., income statement (profit and loss), balance sheet and cash flow statement. The Chart of Accounts is where this General Ledger information is viewed and managed.
Chart of Accounts
The central focus of the General Ledger is the Chart of Accounts.
The Chart of Accounts is primarily made up from two types of segments: General Ledger Accounts and Dimensions.
General Ledger Accounts are compulsory and form the basis of your core Chart of Accounts. These accounts are grouped, at the highest level, by Profit and Loss (also known as Income and Expenditure) and Balance Sheet, with additional categorisation optionally available.
Dimensions are segments assigned to transactions to allow a more detailed and analytical financial view. Business Central allows an unlimited number of dimensions and rule structures to be applied to control the relationship between specific General Ledger Accounts and Dimensions.
Business Central provides a dimensional Chart of Accounts capability that enables and supports the ability to segment, analyse and report on the business’ financial balances by any individual or combination of segments, e.g. profitability by customer and product type, organisation costs by location and department, etc.
Standard Chart of Accounts
When deciding on your Chart of Accounts, there are two options:
Option 1 – Utilise the Standard Chart of Accounts
Business Central includes a Chart of Accounts structure as standard, which can be utilised. This is a full list of General Ledger Account codes, covering multiple usage scenarios and saves the time of creating a new Chart of Accounts from a blank canvas. Theses codes, as standard, pre-populate the relevant posting tables, further streamlining implementation time. Select the button below to view an outline of the standard Chart of Accounts:
Option 2 – Utilise an existing Chart of Accounts
Either an existing Chart of Accounts structure, or a newly defined one can be used with Business Central. This allows flexibility and the option to continue with business’ existing Chart of Accounts, as is or with minor changes. However, this also unlocks a potentially rare opportunity of being able to start again with a fresh new Chart of Accounts coding structure to allow growth, future proofing and possibly consolidation with other business’ within your organisation. Whilst the maximum number of alpha-numeric characters for your General Ledger Accounts is 20, five or six numeric characters are most common and manageable.
In Dynamics 365
For more information on setting up the Chart of Accounts in Dynamics 365 Business Central, please follow the link below: