In India and nearby subcontinent specifically in SMEs and trading houses purchase account posting system is widely used, So while implementing SBO and thereafter during post Go-Live support phase it becomes very lengthy to persuade Accounting department that in perpetual method there is “NO” trading account and net difference can be visualized in P&L itself. So, obviously Gross i.e. Revenue from Operations -(Minus) COGS only can be visualized by crystal report or export to excel etc.
Secondly, for India localization prior to SBO 9.3, there were 3 + 2 = 5 drawers in SBO Chart Of Account, So, While creating P&L Reporting Template; getting Gross difference directly from Revenue (Operation Only) minus COGS and no other indirect expenses becomes difficult for setting formula in template
As a solution, now in SBO 9.3 onward apart from standard five drawers additional five drawers are available(For All Localization) which could be utilized to have Chart of Account segregated according to more flexible way and later those drawers are also visible individually in Profit & Loss Reporting template for adding calculation fields; more over even in “Balance Carry forward” utility for period end closing as well, apart from revenue and expenditure drawers additionally created drawers are also available for selection So at the end of day fundamentally it won’t change anything rather Chart of Account can be segregated in accordance with Direct Expense, indirect expense, revenue from operation, other income etc.
As we know five additional drawers are now available in Chart of Account for all localization herein w’ll have a look on how get benefit by utilizing some of them
We may use some of drawers even by renaming existing ones as shown in below figure wherein you would see that actually P&L has been extended or in other words cluster of ledgers have been split in to additional drawers
Later by Financial Report Template it becomes easier to add calculated fields , as shown in below figure
Needless to say result is amazing, as we normally strive to get is now possible vary easily to give more satisfaction to client especially Finance – Account Department
When ever P&L is retrieved we can have details as if we are seeing traditional P&L (Purchase Account posting system with trading account & Gross Profit) below figure shows the same
Even while doing period end closing when we execute balance carry forward utility additionally created drawers can also be added seamlessly as shown in below figure
In a nutshell, at any given point during fiscal, below questions could be answered very quickly by just retrieving Profit & Loss statement
- What is the sum of Direct Expenditure ?
- What is the sum of indirect Expenditure ?
- What is the sum of Revenue from Operations excluding Other income
- What Gross profit or Loss i.e. Revenue from operations -(minus) COGS (Cost Of Goods Sold)
- What is Net profit /Loss i.e. Revenue from operation + other income – direct expenditure – indirect expenditure
If I summarize, Then does it cost more or take more effort answer is “NO” and with a little more detailing of Chart of Account and its Profit & Loss ledgers split in additionally available drawers can make difference to all stack holders of project by giving run time accurate figures especially Gross profit / loss and it can give an edge to reporting with usage of almost standard functionality. and of course it would save functional consultant’s long debate with Account team….!!