Dimensions in Accounting

"Dimensions" I came across this word 101 times while surfing for accounting applications. Does this makes any sense to you? I thought of talking about Dimensions today.

First, think of your business as a cube. You can look at it in different angles. You can see more information than you think of it as a picture. When you look only in one angle, you can't get detailed and in depth knowledge on your business. But if you look at your business in different dimensions, you will definitely find it more interesting and more informative.

The financial statements and reports are the indicators of health of a business. However, a traditional report on monthly expenses informs whether the overall expenses have overgrown the profits or not. Ever wondered having this report on different angles? If you could see your business in different angles, it will give you in depth knowledge on expenses of different angles. We call theses angles, dimensions.

The dimensions takes different forms based on the company structure and policies. Following are some activities you can use as dimensions.

• Projects 

• Jobs

• Cost centers

• Departments

• Sales locations

• or whatever you define 

Projects

Project is a collaborative set of activities carefully planned to achieve a particular aim. This can be conducted in-house or out-sourced. You can consider Project as a dimension, and gain in-depth knowledge on your business from the Project view point.

Ex: suppose you handle multiple projects concurrently. You can separate the cost or profit contribution from each project to the company using dimensions. As a result, you can decide the amount of money to be pumped in without harming the overall revenue generation of the business.

Jobs

Job is an activity performed in a company. The duration of a job can vary from one day to several days. It presents in manufacturing as well as in services. Job as a dimension is ideal for job costing activities.

Example for a job in services is, after sale product maintenance. Further, a job in manufacturing is, designing and manufacturing user defined product like a shoe, food item or an equipment.

Cost centers

Cost center is the division that adds costs to the organization. This does not generate profits directly but support gaining profit in an indirect way. Research and development, Marketing and Customer Service are such cost centers in a company. Monitoring cost centers and having reports based on these can be used in crucial decision making by the managers. As the cost centers have a negative impact on the profit these become the first to consider when cost cutting decisions are made.

Departments

Department is a subdivision of a business/company. Finance, Marketing, HR and Manufacturing are few examples. In order to understand the contribution to the betterment of the company through increasing profits or reducing costs, it is vital to closely monitor these departments.

Sales Locations

It can be within a close proximity or even in distance. You can analyze accounting information as cost and revenue of the locations separately by selecting Sales Location as a dimension.

Those were few examples of dimensions. Still confused? In simple terms maintaining dimensions are a simple way of keeping tracks of the various segments of the company. Further you can analyze accounting information such as cost and revenue based on the defined dimension.

ZoomBA cloud Accounting app supports dimensions. You can select whether to have dimensions or not. For instance, when dimension = 2, you can select, level 1 as department and level 2 as cost centers. This allows you to keep tracks of cost centers inside a department of your company. Suppose you use the default settings, 1 level of dimension (dimension = 1), then you can look at the business with the angles of department or cost center or project inside a company. If you think it is not necessary or complicated to use dimensions, then you have the option to turn off the dimensions by selecting 0.

You can define the level of dimension from setup menu as follows.

1. Go to Setup section from top menu bar
2. Now click on the Company Setup categorized under Company Setup
3. Select the number of dimensions from the Use Dimensions dropdown list (from the left hand side column)
4. Click Update to update the details of Dimension

How to enter a Dimension Entry

1. Go to Dimensions section from top menu bar
2. Now click on the Dimension Entry categorized under Transactions
3. Enter the details of the Dimension you want to update (Name of the Dimension, Type, Start date, etc)
4. Then click Add to add details of Dimension
   

How to view an Outstanding Dimension

1. Go to Dimensions section from top menu bar
2. Now click on the  Outstanding Dimensions categorized under Transactions
3. Dimensions are displayed while overdue dimensions are highlighted in pink colour

In terms of Jobs as a dimension, there is a separate Manufacturing module for the manufacturing jobs in ZoomBA cloud Accounting App. The dimensions are ideal for the service oriented jobs.

Analyzing costs and revenues based on different angles, selecting the number of dimensions, monitoring the outstanding dimensions (ex: information on receivables that were not collected), viewing or inquiring all the records under dimensions and adding tags to enhance the search functionality are some of the benefits of Dimensions. ZoomBA cloud make sure that you are comfortable with your accounting with all these functionalities.

Please leave your views and suggestions on this blog. Stay tuned.