Hi can anyone suggest me the following:
I have a chart of accounts with all the direct expenses being posted collectively.
So far we have 5 major product groups.
If i make a cost center tree in a following way
-Direct Expenses
–Cost Of Sales
—Product Group A
—Product Group B
How should i ammend my existing Chart Of Accounts and postings of direct expenses to comply with the proposed structure of Cost Centers without much complications.
The company structure descends from COA towards Cost center to covers branches, locations or similar hierarchy.
Only one COGS GL Account can record all kind of transactions having Item Group as Accounting Dimension which can be fetched automatically from item master. The Accounting dimension then will get you all accounting reporting segregated based on item groups.
You can use buying and selling Cost center in item group as well.
On the other hand. You can also work with item group to achieve these reporting structure.
How to do it;
you are good to go then.
maintain selling cost center for the company of the item group defaults child table in Item Group master
Most people try to mirror product groups inside the Chart of Accounts, but it’s way easier to keep CoA simple and let Cost Centers do the heavy lifting. Otherwise you’ll end up maintaining duplicate expense heads and it’s messy.
Thank you for the detailed explanation.
Would you like to have a look and suggest something onto this?
Setting that Revenue from ctns as default selling cost center into the item group of that particular group (under which all items of this item group come) reflected the income and its direct cost in P&L so served my purpose.
