Define and configure financial dimensions

A financial dimension is a subaccount to the general accounts, which allows accounts to be broken down into additional detail for reporting and analysis. Without dimensions, multiple accounts would need to be created for each combination of account and financial dimensions such as department, cost center, and purpose.

There are some key benefits of using financial dimensions.

  • They provide a more detailed description of a transaction.
  • They simplify the accounting process when you enable detailed analysis without the creation of a detailed chart of accounts.
  • They are defined to analyze and classify financial transactions.
  • Financial transactions usually are organized according to voucher and account number.
  • Additional grouping and classification options are available when you assign several dimensions to transactions.
  • They enable you to view the data file from different perspectives to improve the effectiveness in tracking figures accounts.
  • They can be used throughout Finance.

You can add dimensions to base data such as:

  • Ledger accounts
  • Customers
  • Vendors

Use the Financial dimensions page to create financial dimensions that you can use as account segments for charts of accounts.

Financial Dimensions

There are two types of financial dimensions: custom dimensions and entity-backed dimensions.

  • Custom dimensions are shared across legal entities, and the values are entered and maintained by users.
  • For entity-backed dimensions, the values are defined somewhere else in the system, such as in Customers or Stores entities. Some entity-backed dimensions are shared across legal entities, whereas other entity-backed dimensions are company-specific.

Create Financial Dimensions

After you've created the financial dimensions, use the Financial dimension values page to assign additional properties to each financial dimension. You can set options for dimension values that can be shared between a chart of accounts and a legal entity. You also can set specific options for dimension values based on the chart of accounts or legal entity specified.

Dimension Values

You can use financial dimensions to represent legal entities, so you don't have to create the legal entities in Finance. However, financial dimensions are not designed to address the operational or business requirements of legal entities.

The interunit accounting functionality in Finance is designed to address only the accounting entries that are created by each transaction.

Before you set up financial dimensions as legal entities, evaluate your business processes in the following areas to determine whether this setup will work for your organization:

  • Inventory
  • Sales and purchases between financial dimensions and legal entities
  • Sales tax calculation and reporting
  • Operational reporting

Here are some of the limitations:

  • You can use sales tax functionality only with legal entities, not with financial dimensions.
  • Some reports don't include financial dimensions. Therefore, to report by financial dimension, you might have to modify the reports.