5 reasons you need to use NAV dimensions (part 2 of 15)Posted: March 12, 2013
Still not convinced that leaving your old multi-segmented chart of accounts behind is a good idea? Don’t know exactly what in the world that crazy grid illustration with a number in only one box and words in the rest has to do with accounting, at all? Here are my five reasons for why you should be using dimensions.
1) Your chart of accounts is shorter. Seriously now, my company was the one with the 4,000 accounts in the chart of accounts before we installed NAV. We used project codes heavily, and had three to four segments to each base general ledger account number. Every member of the accounting team had this gigantic dog-eared book on their desk they would reference as they went through their day. Not only was it impossible to remember all that detail, it took a long time to type those numbers into the system, and with so many manually entered numbers, it was very easy to make a mistake. We spent a full two days every month during the close investigating and researching whether things went into the right place and then constructing reclassifying entries to correct the errors. My chart of accounts is less than 200 accounts now, and we eliminate a few more every year.
2) Account coding becomes intuitive. We still use project codes heavily, but now we’re able to give them a name as well as a number, which makes the coding process much more intuitive, less prone to error, and allows people outside the accounting department to enter data into the system. We work with a lot of non-numbers people at our company, and just talking about money has become easier since we started using dimensions. Nobody needs to get out the big dog-eared book to “determine the coding for your recent T&E”. We can use actual English and say things like, “Code that expense report to the Marketing team for the recent children’s sunday school event in Ohio” and everyone knows where that will be coded when the invoice gets entered to NAV.
3) Better control and accuracy. Certainly with having more intuitive coding and a shorter chart of accounts, we should all see some improvement in control and accuracy of postings. But wait, there’s more! NAV does a fantastic job of layering in more features for dimensions like allowing automatically populated default values, adding warning messages to make sure you get the right kind of dimension in the right place, allowing control at the level of your master data as well as your chart of accounts, and allowing restrictions on what dimensions can be combined with other dimensions and with what priority. All of these features combine to make sure the computer does the work instead of your employees and does it more accurately. Remember those two days my company used to spend to review and correct entries with reclassifications? Last year, I was able to send out an email out for three month end closes letting my team know they had a perfect posting month – no errors – not a single reclassification.
4) Greater flexibility in your reporting. Even with this shorter chart of accounts, we actually have more detail than we had before, because getting more detail through use of dimensions makes it possible. The idea of adding another segment in the old system to support a changing reporting need was heinously prohibitive. With dimensions, we gain that flexibility without adding another 400 pages to our chart of accounts. We produce more reports with more valuable information now than ever before, and we have the ability to combine the data we’ve gathered in more flexible combinations to assist us in making business decisions.
5) You’ll continue to have more options, even after go-live. I think a lot of people believe the only time they can make decisions about dimensions is when they are initially implementing. While this is a very important time to lay the foundation for your NAV system, you do have the option to add or change dimensions as you go along. We’ve actually added about one new dimension annually, as our business needs have changed, and as we’ve determined we need to report on different priorities.
Keep reading this month as we continue our series, 15 Days of NAV Dimensions.