Sub Accounts and Custom Income/Expense Accounts and Custom Control Accounts

1

I think that I just need to see if I have clearly understood how to best use

  1. Custom Control Accounts
  2. Sub Accounts
  3. Tracking Codes
  4. Custom Income and Custom Expense Accounts

Custom Control Accounts - This is used to split a control account on the summary page into the different accounts contained within a control account on the summary page.

For example, Cash and Cash Equivalents could have bank account and petty cash when you drill down. But if you want to see bank account and petty cash on the summary page instead of Cash and Cash Equivalents you need to use Custom Control Accounts to break this up.

I wonder if this should be called Sub Accounts as Petty Cash and Bank Accounts are both sub accounts of Cash Accounts Tab. To me the name Sub Accounts is more relevant and more logical here!

Tracking Codes - This is used to split the company into divisions such as LA Branch and New York Branch, or Retail Office and Warehouse etc. Basically Tracking codes is about company divisions.

Sub Accounts - This is bascially where you have headings like Client Expenditure, Company Expenditure and Employee Expenditure and you can categorise the expenses under Client Expenditure for things like delivery fees, Inventory-Cost and basically any purchase that you make in order to generate a sales (COGS).

Company Expenditure would be non client related stuff like Accounting Fees, Advertising and Promotion - in short Company Running Costs that incur regardless of any clients or sales.

To me sub accounts should be called Account Categories or multi step summary or summary sections or something like that as from what I understand one is dividing the expenses/income/asset/liabilities up into sections on the profit and loss statement - they are not really sub accounts as in an account that goes under another account. To me the concept of Custom Control Accounts is what I would call the Sub Accounts as you are breaking up the Control Account into Sub Accounts per se! This is why I always get confused with sub accounts and Custom Control Accounts as the current names are not logical names for these functions.

Custom Income and Custom Expense Accounts I am not really sure that I understand the difference between these and Custom Control Accounts unless Custom Control Accounts for inventory items for example would lump both purchases and sale of inventory items into that Custom Control Account - something that I cannot see the point of under any circumstance. Is this the difference between Custom Control Accounts and Custom income and Custom Expense Accounts?

Usage for Inventory Items I think that I need to use Custom Income and Custom Expense Accounts to create income and expense accounts like Laptop Sales and Laptop Purchase to break up the inventory sales and inventory purchases into the categories that I want. However, neither myself nor my accountant want to see a long list of Inventory Categories such as computer, laptops, whiteboards, projectors, printers, software, Network equipment as its not relevant to end of year return and I would find it more useful most of the time to have the total for inventory sales and inventory purchases. So I would need to use Sub Accounts and create two sub accounts called Inventory Sales and Inventory Purchases and put all my custom income and Custom Expense Accounts underneath these two headings.

This would give my accountant the information that she needs which is the inventory sales total and inventory purchases total - as well as myself as that figure is the more relevant one. This would also give me the ability to view the individual inventory categories such as computers and laptops so that I can see how well each category does etc.

The problem sill hower is the long list of Inventory Categories that don’t need to be permanently visible on the summary page.

My Recommendation - would be to enable one of two features

  1. When we click on Inventory Sales (i.e.) drill down, we get a view of inventory by category - that is the Custom Income Accounts such as Computer Sales and Laptop Sales and then we can drill down on say computers to view all computer sales.
  2. Another Option would be to retain the Sub Accounts Concept, but allow Sub Accounts to be hidden or expanded by clicking on a plus box sign next to Sub Account such as Inventory Sales

I would prefer the second option for several reasons. It can be easily used by all sub accounts, not just Inventory Sales and Inventory Purchases. If you want to look at two sections of the summary page and compare figures etc, you can mimimise (hide) all other sub account sections to prevent having to scroll up and down the summary page. Thirdly it allows you to compare two different sections of the summary page which you cannot do if you are drilling down. Lastly, it allows you to hide infrequently used sections of the summary page which would solve my main issue of not showing all the inventory categories on the summary page or in profit and loss statement.

Sorry for the very very long post, but I am trying to get this right for my inventory. Currently I am using tracking codes for inventory items, but this is unsatisfactory as tracking codes are meant to be used for divisions not to differentiate between computers, laptops and whiteboard sales especially when the company is a small IT Company. Secondly, using tracking codes means that I have to create reports everytime I want a quick overview at what inventory categories are selling well and what is not. Yes I could create a report, but I think that inventory sales and inventory Purchases should have some kind of useful breakdown of the inventory on the summary page in the same way that you can break down the cash and cash equivalents into all the different accounts that make up cash and cash equivalents. Just having a list of all the inventory transactions is not sufficiently useful whereas breaking up inventory into categories like laptops, computers etc would be far more useful.

2

While it can appear this way, that’s not how it works. For example, you can create a custom control account for current liabilities and assign a credit card (created under the Cash Accounts tab) to it. The custom control account can then be made to appear under Liabilities.

3

I did not realise that you could split it from say assets into liabilities. But what you say and what I say is essentially the same thing. In both examples, the Control Account is being split into different accounts to show on the Summary Page - the only difference being that in my example both accounts remain in the Assets Area whereas in your example, accounts move from Assets to Liabilities. But the default control account is split so I kind of think of this as sub accounts more :slight_smile:

4

The important distinction is that you are not splitting a control account. That is not the right way to think about it. You are creating an entirely new control account and assigning things to it.

Thus, you can assign a cash account (as in my previous example) or a fixed asset or an inventory item to a different control account. But the new control account, with its reassigned subaccounts, is in no way subordinate to the original account.

So, if you split fixed assets into land, buildings, and furniture, those new headings are control accounts in their own right and do not roll up into fixed assets. Specific assets would then be assigned to the new control accounts.

I haven’t played games with chart of accounts groups and totals to see how they might be combined for display, but they are not linked for record-keeping purposes. The fact that something assigned to a control account was created under any given tab is immaterial. The original tab (such as Cash Accounts) controls functional features and has no direct relationship to the control accounts to which its elements might be assigned.

5

The first thing to clear up is that Custom Control Accounts are only related to the BS.
Custom Income/ Expense Accounts are only related to P&L - so that gives them clear separation.

Currently, user created Custom Control/Income/Expense accounts are parent accounts, that is, they are displayed on the Summary/Balance Sheet in there own right as they are substitutes (not sub-accounts) for the Manager default Control Accounts.

Therefore, (currently) these user created Custom Control/Income/Expense accounts can’t be children accounts of the Manager default Control (parent) account which is what @dalacor is alluding to.

Perhaps the feature of Parent / Children accounts for a particular tab could be a future enhancement where the user has the option of Parent / Children structure for Inventory Items but Parent only structure for Fixed Assets.

Maybe the use of broader groups of inventory items may be a first step instead of micro grouping.

6

@Tut Yes I can see your point about them becoming Control Accounts in their own right, so it would not make sense to call them Sub Accounts. However I still think Sub Accounts should be renamed as the name is not intuitive. Custom Control Accounts now that I understand them better - I wil concur that the name now makes sense.

@Brucanna - Thank you for explaining the Custom Control Accounts and Custom Income/Expense Accounts. I had not picked up that Control Accounts only apply to the BS whereas the Custom Income/Expense Account naturally apply to the P&L.

Thus clearly what I want is to use Custom Income/Expense Accounts for my inventory Items. I believe that the best approach would be to use Sub Accounts and Custom/Income Expense Accounts together to put Computer Sales, Laptops Sales etc from inventory onto the summary page and use Sub Accounts to put it under Inventory Sales Heading. Then I would need to request @lubos to include the ability to hide/maximise the sub accounts as explained earlier.

I don’t agree with your suggestion of creating parent/child accounts only for inventory items but not for other areas. I think it should be as consistent as possible across all tabs and my method I think solves more than one problem as outlined. But Lubos will no doubt have his own ideas as to how he wants Children Accounts to move forward with the program.

@lubos would you be able to confirm whether you have plans to do something along the lines of the two suggestions that I mentioned in my post under My Recommendation so that I can get started with moving inventory items to Custom Income/Expense Accounts and putting it under a sub account.

7

What I would like to do ultimately is this -

Where it says Inventory - Sales - I would like to have a Heading Called Inventory Sales which would include the total and this would be under the heading Client Sale of Goods Income which would include the total for the Inventory Sales as well as all other Client Sale Income. Then under the Heading Inventory Sales, I would have all my sub accounts such as laptop sales etc. Then next to my heading inventory Sales - I could have a plus that would enable to display or hide the Inventory Sales Sub Accounts.

Same concept with the Expense in that Inventory Cost would be the heading which would go under Client Expenditure.

Edit: You need to click on the picture to get it to show the entire picture.

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8

I actually wrote “option” not “only”
“where the user has the option of Parent / Children structure for Inventory Items but Parent only structure for Fixed Assets”.

Also “being consistent across all tabs” is very restrictive - the user should have the freedom to select between Fixed Assets (for example) being displayed as either Parent only or Parent /Children, depending on their Summary/Balance Sheet report requirements - however this is all rather academic as at this point of time Custom Control Accounts can only be Parent accounts.

Bring on Budgeting

9

Yes I agree with everything you are saying here. I misunderstood what you meant. I thought that you meant to design the program to allow Parent / Child Structure for only inventory items and no other area - this is what I meant by consistency - if you can do it in one area, you should be able to do it in another area.! As you say making it optional gives end users flexibility. So we are basically now in agreement!

I will wait to hear on what Lubos has to say regarding my inventory issue. I am not an expert at programming, but I think my plus hide/show suggestion should be quite quick to program. As for creating child structures - that may require a bit more work I would guess.

Yip I am looking foward to budgeting as well. Can’t wait for that.

10

@lubos I appreciate that you are busy with sorting out the various bugs in the latest version but if you have a moment, I would be interested in hearing whether you are intending to implement something like my plus sign option or if you have some other plan in the pipeline for categorising inventory. This would be helpful to know before I move all my inventory transactions from sales of inventory and inventory - cost to the various custom income and expense accounts. Thank you.