Companies need a view of finances that’s both deep enough to see the details and wide enough to look across all operations globally. Unfortunately, that’s often not as easy as it sounds.
A key approach to accomplishing this is to use a multidimensional model structure. This accommodates different account coding schemes within the same company, giving the Chart of Accounts (COA) the flexibility to measure profitability in many different ways. That way each line of business can measure profitability the way it needs to, and at the same time, there is a single reporting ledger so finances are always in balance. In contrast to “Code Blocks” that are flexible once, the multidimensional model structure is built to accommodate diversity and can be updated on the fly.
Business needs continually change and the multidimensional model can accommodate that. A company may need, for example, to account for both GAAP and IFRS, or need to report profitability against different criteria for different business units. If a company has recently acquired or merged with another business, it’ll need to accommodate the new operation in its COA. Additionally, as management and industry practices evolve, a company may change its key performance indicators (KPIs) measuring profit and performance.
With this flexible accounting approach, multinational corporations and companies doing business overseas can get the visibility and insight they need to achieve their goals as well as handle business and industry-wide changes with minimal disruption.
To learn more about addressing change in your organization whether it’s caused by a merger or acquisition, global expansion, or a new line of business, download our free white paper, “Accounting for Change” or visit UNIT4 Business Software’s website for maximum flexibility and minimum cost and disruption.
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