Dynamic Dimensional Accounting With Sage X3

Attention CFOs

The problem that many traditional ERP’s have is that they follow a rigid structure when setting up the chart of accounts.

From a definition standpoint, a segmented General Ledger (GL) is one in which the chart of accounts is a single, concatenated string that consists of various segments that capture specific information.

The defined number of segments must be present for every defined account, even if that segment doesn’t necessarily “go” with that account.

As an example, to track three sites, five cost centres and five product lines, you’d need to create 75 account code combinations. Just adding a new site or cost centre could potentially force you to add hundreds of additional accounts.

What are the Repercussions to your business?

  1. Admin intensive – This means taking the time to set up several hundred accounts for each GL account to accommodate the various segments, not to mention the unwieldy process of managing all of them and any potential human error.
  2. A lengthy and complex GL / chart of accounts – Reporting will be complex and slow – gaining insight into your business operations and performance is a manual and time-consuming task.
  3. Inaccuracy – Reporting is reliant on users firstly creating & then selecting the correct permutation for reporting.

Let me introduce you to a new perspective

With Sage X3, the ANALYTICAL DIMENSIONS capability offers an entirely new way to track and report on financial and operational data, while simplifying your chart of accounts. With this flexible financial foundation, you gain quick access to the insights that speed up decision-making and help drive growth and gain a competitive advantage without increasing the manual work your staff must complete.

How it works – Dimensions in 3 steps

Step 1: Plan

Sage X3’s analytical dimensions lets you keep it simple – you only need to set up your primary / natural GL accounts.

It is just a matter of telling the system how you want to slice and dice the data by setting up all your dimension types and dimension values. The segments now become your Dimension types (“slices” or “tags”).

For each dimension type, you can then specify the Dimension values (for example, dimension type: Industry, would have dimension values: Industrial, Resources, Property and Finance).

Step 2: Define

You can then say to the system “for this GL account, I want to analyse it by these slices” – just assign the dimension types applicable to each GL account.

Remember, you are only setting up one GL account as opposed to the same GL account numerous times.

Now it becomes GL account specific. Before, every single account had to have the same string. This allows you to create a much more focused analysis and no more unnecessary/unused accounts!

Step 3: Automate

How does the system know to automatically populate the dimension value when you enter a transaction?

You set up the relationships in your master data.

For each transaction type, a default is set up based on a hierarchy (e.g. Company, Customer, GL Account etc.).

This only ever needs to be entered once!

This means that there are no limits on the granularity of the data that you can gain insights into!

A dimensional chart of accounts is like going from 2D to 3D.

What is the Value and Efficiency Gain?

  1. Streamlines your chart of accounts – Limits the overall maintenance on GL accounts and your chart of accounts remains pure.
  2. Tracks your business like never before – You can analyse your income statement however you choose. Reporting capabilities are increased and more granular.
  3. Saves time on reporting – It combines flexibility and functionality to grow your business without adding a burden to the back office.
    With Sage X3 you can gain actionable insights, providing your team with the information they need to make faster and more strategic decisions and to respond to changing business conditions.

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After evaluating a number of solutions, we decided that Sage X3 would support us with an integrated, agile platform for the future growth of our
business.”

Nick Hollowell, CFO , Luba Freeport
Norway
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2019-07-02T12:32:11+00:00