One of the most important things to think about when implementing a new ERP system is the design of the chart of accounts. Thedefinition of a chart of accounts can be different across applications and can mean different things to different users. An account number may or may notinclude the concept of a legal entity segment, depending on whether the system supports a global/shared chart of accounts or whether a separate chart ofaccounts must be created for each legal entity.
There are linear charts of accounts and there are relational charts of accounts. A linear chart of accounts requires the setup of everysupported combination of segment values prior to using them in order for an account number to be valid. These account numbers may be created manually orthrough an automated function based on some defined rules. A relational chart of accounts is made up of different components, or building blocks, that allowan account number to be ‘created’ at time of entry. Microsoft Dynamics AX 2012 has a relational chart of accounts.
A new financial dimension framework was introduced into Microsoft Dynamics AX 2012 to provide the building blocks for the chart ofaccounts. This blog series is focused on describing these different building blocks and to provide some things to think about when designing the chart ofaccounts. This first entry will provide the high level overview and then I’ll break it down over future posts.
The conceptual drawing of the different components that define chart of accounts in Microsoft Dynamics AX 2012 looks like this:
Future posts will go into more detail, but at a high level, the conceptual drawing is stating the following for Dynamics AX 2012:
The next post for this blog series will focus on the Chart of accounts and its related setup.