I am entering data off another P&L for last year(Comparison year values). The last accountant had a lot of groups in the expenses. I don’t want that but I would still like to be able to bring up the group data. So would I do Tracking codes instead of groups in chart of accounts. I would have the tracking code name as the group header ie: Travel Expenses. and then in the exception report it will show the tracking code and all thats listed under it and I can export this to excel to do charts etc.There for everything would be listed under expenses in the P&L with no group headings.
I am just setting up chart of accounts and didn’t want to add groups if i didn’t need to and thought I would check to make sure my thoughts were right.
I don’t think the tracking codes should be used to dissect expenses. Tracking codes are intended for divisional reporting. I can understand you don’t want to pollute your P & L with too many sub-accounts but that may be less of an imposition than allocating tracking codes to many transactions.
You say you are entering data “off another P&L.” Presumably, that means you are only putting yearly totals as entries. In that case, the prior year’s data is only going to be one number. So why bother with a tracking code at all? Tracking codes separate transactions in a range of income and expense accounts, not just one account.
If you don’t want a bunch of groups, leave them out. Groups only summarize accounts; the accounts must be there underneath, because you can’t post anything to a group. And if you don’t want so many accounts, summarize last year’s data by combining accounts so the combined totals will correspond with this year’s accounts.
Tracking codes would enable current year transactions as they accumulate to be compared against the prior year’s one number, within the previous group structure but can’t see the benefit.
Tracking codes can be used to rationalise accounts, but not as substitutes for group headings.
If the Travel Expenses group contained these types of accounts:
Accommodation - Local
Accommodation - Overseas
Flights - Local
Flights - Overseas
Then this could be rationalised to
Accommodation
Flights
with Tracking codes used for Local and Overseas