Added ability to create divisional balance sheet

The latest version (21.6.27) adds ability to create divisional balance sheet.

A few weeks ago I’ve disabled ability to be able to set tracking codes on transaction lines if you’ve selected balance sheet account.

There was no built-in report that was leveraging tracking codes on balance sheet accounts but there have been requests to be able to create balance sheet for tracking codes just like it has been already possible on profit & loss statement.

Now, the issue is that balance sheet must represent real accounts, not movements in those accounts. So the tracking code (or division) needs to be set on account-level rather than on transaction-level.

Let me demonstrate.

Let’s say you have two divisions:

  • Awesome division
  • Brilliant division

For now, you create these divisions as Tracking Codes under Settings tab (I will be renaming Tracking Codes for Divisions because this term is better suited).

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Every balance sheet account (or sub-account) can now be assigned division. That is:

  • Bank accounts
  • Cash accounts
  • Customers
  • Suppliers
  • Employees
  • Inventory items
  • Fixed assets
  • Intangible assets
  • Special accounts
  • Capital accounts
  • Expense claim accounts
  • and the custom balance sheet accounts defined in Chart of Accounts.

For example, when you create a bank account, you can set division to which this account belongs to.

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Now let’s create fixed asset which will belong to the same division.

Then let’s create payment transaction that will purchase this fixed asset.

As you can see, when entering transactions and interacting with balance sheet accounts, you do not select division on individual transactions. Balance sheet accounts are always “owned” by single division. In other words, balance of the account is owned by division. Not the movement. You are not tracking movements like on P&L.

When we create divisional balance sheet.

image

We will see

Balances correctly show under Awesome division column.

You can do interdivisional transactions too. For example, fixed asset could belong to Brilliant division which could have been purchased using money from Awesome division.

Let’s edit fixed asset and assign it Brilliant division instead.

Then look at the balance sheet again.

Now you can see the fixed asset we have purchased is under Brilliant division.

There is also new account called Interdivisional loan which automatically tracks loan between divisions so divisional balance sheet always balances.

If you have an existing business, you can migrate to divisional accounting by simply editing every balance sheet account and selecting division. This is enough to produce divisional balance sheet.

2 Likes

@lubos Thank you, great development. I observed that it seems you can for example only have one division for a bank account, but it would be much more useful if this could be one or more.

You do not have to select division on bank account. You can leave division empty. Then bank account will not belong to any division and will show on consolidated balance sheet only.

I understand, but we actually have one company with four divisions of which three share a bank and a cash account and one has its own bank and cash accounts. Indeed, without the division system we had to create two diffferent “businesses” for this with tracing codes used in one of them.

That’s fine. You can make one of those three divisions to own the bank account. It doesn’t mean that net assets of that division will be inflated because there will be interdivisional loan.

Try creating bank account for division A and record receipt which will be a sale attributed to division B (e.g. $100).

You will see net assets of division A will be still $0 even if it owns the bank account because even though it has $100 in the bank, it also owes $100 to division B which results in $0 net assets.

Dear @lubos

May I suggest making a link to Tracking Codes Profit and Loss. this will help in allocating suppliers and customers bank and cash based on tracking code in profit and loss account

having this option will close below idea from the list

we should have an option in Tracking Codes Profit and Loss Account to link the cost center to a division code

this approach will help in allocation on both entry level and account level in case it is set up in the system

Division codes are not being assigned to starting balances.
In the snapshot below the starting balance is $743.98

@AJD I’m aware of this issue. It will be fixed within a few days.

1 Like

Thanks

Dear @lubos, is it possible in the “divisions” settings to set up it the division should be used for BS, P&L or both; so that, for example, if it set only for BS, a particular division should appear only for divisional balance sheet.

What are you trying to achieve by having this?

Being a property company some tracking codes, ie divisions, are used only for P&L. In my case it is divided by building. Some other divisions are used only for BS, in my case for each investor.

So having a flag to assign a division only to BS or to P&L it would be very useful. It should only be a filter on the list in the drop down menu.

But I admit that this should be optional because many times the divisions should be the same in BS and P&L.

So the options should be three:

  1. BS and P&L (default)
  2. BS
  3. P&L