Difference between revisions of "Handling very detailed Job Types in the Chart of Accounts for P & L"

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(Created page with '== Handling very detailed job types == NEOSYS can provide very detailed analysis by job type but it is not advisable to mirror this in the chart of accounts for P&L In many cas…')
 
 
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== Handling very detailed job types ==
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== Analysing job types using Billing Analysis instead of P&L breakdowns ==
  
 
NEOSYS can provide very detailed analysis by job type but it is not advisable to mirror this in the chart of accounts for P&L
 
NEOSYS can provide very detailed analysis by job type but it is not advisable to mirror this in the chart of accounts for P&L

Latest revision as of 11:57, 11 June 2018

Analysing job types using Billing Analysis instead of P&L breakdowns

NEOSYS can provide very detailed analysis by job type but it is not advisable to mirror this in the chart of accounts for P&L

In many cases in the past, especially where the finance system was a standalone package and was not integrated with billing modules, billing analysis reports were provided out of the financial module. It is tempting therefore to think that a detailed breakdown of job types should be shown in the P&L chart of accounts. However, fully integrated billing and finance software like NEOSYS now provide far superior billing analysis reports than can ever be provided by P&L breakdowns.

It is important to note that billing analysis obtained by P&L break-down does not even attempt to show margins nor does it show any analysis by client/supplier/market or any combinations thereof etc.

To summarise, proper billing analysis can be obtained without creating a detailed break-down of income and cost accounts in the P&L chart.

There are also problems with even attempting to get a very detailed break-down of job types in P&L chart as follows:

  1. You will end up with an unmanageable P&L chart of accounts as many rarely used and obsolete income accounts are added over time. Think in terms of years.
  2. It is duplicate work requiring creation of account for every new job type
  3. New job types cannot be created without involving finance department
  4. It is harder to see meaningful comparative figures between years

It is better to think of the job types as a dynamically changing view determined by operations whereas P&L accounts are a largely static view determined by financial considerations.

Given the above, the best policy is to freely put LOTS OF JOB TYPES in the Job Types File but only A FEW P&L ACCOUNTS in P&L chart of accounts. Many jobs types can be mapped to the same P&L account.