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How Many Sub Account Segments (business unit, department, line of business, customer vertical) is Practical?

  • November 19, 2024
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Jr Varsity II
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Our accounting staff want to slice and dice our financial reports by:

 
    -department
    -customer type (customer, reseller)
    -line of business  
    -customer vertical 
    -business unit (sales staff are associated with one of a number of business units)


We have set-up a sandbox environment which has two segment subaccount (business unit and line of business), but our account staff have articulated adding sub accounts (or whatever feature) will allow us to slice and dice financial reports by the above areas.

From a “leveraging the defaults” (e.g. default posting group), we were able to set-up our sandbox so that our transactions would default for the right line of business and business unit when we had two segments.

If we go to four segments, I suspect we might not be able to really leverage our set-ups to really achieve the financial slicing and dicing as required. 

Have you set-up more than 2 segments and how did your default posting code set-up work for you (were you able to acheive the financial reporting you were trying to achieve)?

 

Thanks!

 

 


 

Best answer by Laura02

Hello,

I recommend less than 5 segments in the subaccount, too many becomes unwieldy for any manually entered transactions & adjustments. I advise, use 3 or less if possible.

With 5 segments configured, Posting Classes, Sales Order Types, and other configurations may still be used to drive all 5 segments in the subsidiary modules.

Could Customer Type and Customer Vertical be combined to one segment, with Customer Type being only one digit of the segment? Could Customer Type and Customer Vertical be used as Customer Classes instead of being a subaccount segment? Many AR reports can be printed by Customer Class, including Sales Profitability Analysis and Aging:

Could you please give some examples of ‘Line of Business’ and ‘Business Unit’ so we may understand the difference? 

Is Line of Business different from Product Lines/Inventory Item Classes? Depending on how many lines of business you are analyzing, Line of Business might be handled in Chart of Accounts instead of a subaccount segment. Examples of handling Product Line/Business Line in the Chart of Accounts:

4010     Sales - Apparel

4020     Sales - Shoes

4030     Sales - Linens

5010     COGS - Apparel

5020     COGS - Shoes

5030     COGS - Linens

Linked below is an example of a Unit Set that is being used to report Financial Statements by a single segment of the Subaccount. Use of Unit Sets with Acumatica Financial Reports, or a reporter like Veli xo (Financials in Excel) can facilitate transaction analysis via GL.  “Slice & Dice” by any subaccount segment, or by multiple segments. Here is an example Departmental Unit Set using one of two subaccount segments to create a Departmental P & L.

 

If Business Unit means the same thing as Company or Branch, then I do not recommend duplicating the company ID or Branch ID in the Subaccount. The only time it helps is to identify mistakes in posting, meaning where the Branch doesn’t match the Subaccount segment… someone posted in the wrong company or the wrong sub.  With proper configurations and controls, misposting should be rare.

Here is another link where someone wanted 5 segments and changed their mind. 😉

 

Laura

 

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    • Laura02
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    • November 19, 2024

    Hello,

    I recommend less than 5 segments in the subaccount, too many becomes unwieldy for any manually entered transactions & adjustments. I advise, use 3 or less if possible.

    With 5 segments configured, Posting Classes, Sales Order Types, and other configurations may still be used to drive all 5 segments in the subsidiary modules.

    Could Customer Type and Customer Vertical be combined to one segment, with Customer Type being only one digit of the segment? Could Customer Type and Customer Vertical be used as Customer Classes instead of being a subaccount segment? Many AR reports can be printed by Customer Class, including Sales Profitability Analysis and Aging:

    Could you please give some examples of ‘Line of Business’ and ‘Business Unit’ so we may understand the difference? 

    Is Line of Business different from Product Lines/Inventory Item Classes? Depending on how many lines of business you are analyzing, Line of Business might be handled in Chart of Accounts instead of a subaccount segment. Examples of handling Product Line/Business Line in the Chart of Accounts:

    4010     Sales - Apparel

    4020     Sales - Shoes

    4030     Sales - Linens

    5010     COGS - Apparel

    5020     COGS - Shoes

    5030     COGS - Linens

    Linked below is an example of a Unit Set that is being used to report Financial Statements by a single segment of the Subaccount. Use of Unit Sets with Acumatica Financial Reports, or a reporter like Veli xo (Financials in Excel) can facilitate transaction analysis via GL.  “Slice & Dice” by any subaccount segment, or by multiple segments. Here is an example Departmental Unit Set using one of two subaccount segments to create a Departmental P & L.

     

    If Business Unit means the same thing as Company or Branch, then I do not recommend duplicating the company ID or Branch ID in the Subaccount. The only time it helps is to identify mistakes in posting, meaning where the Branch doesn’t match the Subaccount segment… someone posted in the wrong company or the wrong sub.  With proper configurations and controls, misposting should be rare.

    Here is another link where someone wanted 5 segments and changed their mind. 😉

     

    Laura

     

    Laura ~ Klear Systems, Inc. Irvine, CA. ~ Click my logo to Follow me ~
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    Chris Hackett
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    Jr Varsity II
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    • PatrickBacon
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    • November 20, 2024

    Hi Laura,

     

    Thank you for your thorough response. You posed some questions and here are my answers:

     

    -Could Customer Type and Customer Vertical be combined to one segment, with Customer Type being only one digit of the segment?

    Yes, this might work. I’ll do some checking on this.

    - Could Customer Type and Customer Vertical be used as Customer Classes instead of being a subaccount segment?

    I’m 2x checking with my controller on the real need to slice and dice financial statements by customer type and customer vertical. Historically, we’ve done this analysis on our AR reporting.

     

    - Could you please give some examples of ‘Line of Business’ so we may understand the difference? 

    Line of business is a set of products which are distinct (e.g. think lawn mowers and trimmers). But we manufacture, service and field support our end products with many parts being used and sold to multiple lines of business. With our present set-ups, the inventory item classes don’t help us in this effort always. We could add more items to our item master which could correspond with the end product line (e.g. have multiple parts for each product line it is used in).

    - Could you please give some examples of ‘Business Unit’ so we may understand the difference? 

    Business unit is anything we have historically deemed as a business unit. it is a turducken composed of well-defined customer verticals mixed in with replacement parts, time and material (field service work) and customer agreements 😊. We want to measure this because our main people have historically looked at the business this way.

    Laura02
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    • Laura02
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    • November 20, 2024

    Thanks for the extra details!

    I’m thinking, Customer Classes could represent Customer Type + Customer Vertical, removing these two segments from the subaccount.

    Moving the Customer details to the Customer Class leaves you with 3 segments in GL, none of which directly represents Company, Branch or Inventory Item Classes. (Excellent.)

    • A Subaccount like Department - Line - Unit will facilitate P & L’s  that have Departments across the page, Lines across the page, units across the page. 
    • A Subaccount like Department - Line - Unit will also facilitate entire P & L’s for each Department, Line of Business, or Business Unit. 
    • With a Subaccount like Department - Line - Unit … you won’t be able to print a P & L by Customer type or customer.  Customer metrics may be found in Sales Order and Receivables reports, but not in the GL/Finance module.

    Good luck!

    Laura

    Laura ~ Klear Systems, Inc. Irvine, CA. ~ Click my logo to Follow me ~
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