Divisional Accounting including Budgets
For QuickBooks Online check this link Reporting Locations and Classes
For Xero check this link Tracking Category Reports and Budgets
Accounting for a single office at one location using MYOB is very straight forward, however as soon as another branch or office opens it is important to be able to report on the profitability of not just the total business but also by Branch or by Cost Centres.
MYOB AccountRight can be used out of the box to do some Divisional accounting (be it Branches, states or cost centres), however there are limitations. Investing a little time upfront to understand the different options available and matching them to your specific requirements will save time and effort down the track. See also Analysis Code Comparisons
The questions you should consider are:
- Split Transactions – How often will I need to split individual transactions (invoices) by Division?
- Budgets – Do I want to budget by Division and if so by month or just annually?
- Structure – How complex is my divisional structure?
- Data Entry Effort – How much effort is required for data entry, upfront setting up versus ongoing?
- Multiple MYOB files – Do I have multiple MYOB files I need to Consolidate?
- Reporting – How much effort is required to produce regular P&L reports and Actual/Budget variance reports?
Download the attached Compare MYOB - Divisional Accounting Options document to help identify the best way to use MYOB or a combination of MYOB and BI4Cloud to handle your Divisional accounting needs.
The main options available are to use one of the following:
1. JOBS - Using MYOB Jobs to Account for Divisions or Cost Centres
MYOB Jobs functionality is very flexible and allows for some powerful divisional reporting options.
Divisions can be as simple or complex as you like.
- Setup a Job for each Division
- Apply a Job code to every line of every income and expense transaction to assign it to a Division
- Job Headers can create a Hierarchy of Divisions. For example create NSW as a Job Header then each Branch, Sydney, Newcastle, Wollongong as a Job that feeds up to the NSW state.
- Already using Jobs to run individual projects? No problem, simply create Job Headers for each Division and assign each Detail/Project Job number to the relevant Job Header (division)
- See Use Job Headers to Group Jobs together
- Run Job Profit & Loss in MYOB to see P&L by each Individual Division
- Click MYOB Jobs for MYOB Help on creating and using Jobs.
- Can’t enter or report Monthly Budgets by Job only for the whole year or whole Job
- Reporting from MYOB is Job by Job or Job Header by Job Header separately down the page.
- Difficult to see the Whole company broken down into Divisions across the page
- BI4Cloud can solve all of these issues - see point 2 below
2. BI4Cloud + MYOB Jobs can Superpower MYOB Jobs Reporting
Using BI4Cloud Business Intelligence with MYOB you can easily:
- Budget monthly by Job and by GL account to report Actual v Budget & Variances by Division - (Available in the Cool Stuff Version)
- Report by Job or Job Header including a Whole company P&L broken down into Divisions as Columns.
- See MYOB Jobs with BI4Cloud Monthly Job Budgets for more details
Example - Divisional P&L Pivot by Job or Job Headers
Example - Divisional P&L Filter by Jobs or Job Headers
3. Using MYOB GL Accounts for Divisions or Cost Centres
Some businesses, choose to create a separate GL account for each P&L account for each Division. An example would be have a rent account for each State e.g. Rent - NSW account and another Rent - VIC account.
- Setup is simple just create new GL accounts for each Income & Exp A/c & Division - Once
- Assign every line of every income and expense transaction to the correct income or expense account (A/c includes the Division) (No Job & No Category allocation required)
- Enter monthly P&L budgets directly into MYOB against each GL Account
- Not able to report a Divisional P&L directly from MYOB
- Not able to Filter by individual Divisions in MYOB
- Need to export P&L to Excel and manually reformat the P&L Accounts to separate out Divisional P&L
- Only suitable if you have a very small number of Divisions
- There is no Hierarchy of Divisions
- Difficult to see the whole company broken down into Divisions across the page
- BI4Cloud can solve all of these issues - see point 4 below
4. BI4Cloud GL Custom Lists + MYOB GL Accounts for Divisions or Cost Centres
Using BI4Cloud Business Intelligence you are now able to allocate each P&L account directly to a Division or Cost Centre using our GL Custom Lists. Then in BI4Cloud easily report on monthly Actuals v Budgets by Division. This is a great option for States or a small number of Divisions.
- Simply assign (tag) each GL account to a Division (using BI4cloud GL Custom Lists)
- Do this once only on a one for one basis. (Available in the Cool Stuff Version)
- Report by GL account and report monthly Actual v Budget & Variances and Filter by Division.
- Report by Division including a Whole company P&L broken down into Divisions as Columns.
- See Run Divisions or Cost Centres - Using GL Custom Lists with Monthly Budgets
- Can’t use with Item sales unless each Division has different Items setup for each division as Item sales for the one item all go to a fixed GL account (user can’t edit to allocate some sales to Divn 1 and some to Divn 2). Use Jobs Instead.
- Results in a larger list of GL accounts (one for each Revenue or expense for each Division).
Example - Divisional P&L Pivot by GL Custom List for Division
Example - Setup simply assign each GL account to the relevant Division
5. Categories - Using MYOB Category to Account for Divisions or Cost Centres
MYOB Category functionality can be used for Divisional reporting however it is quite inflexible.
- Apply a Category code once to every income and expense transaction to assign it to a Division, so apply in the transaction header and not on every line
- Can be used to produce Divisional Balance Sheet
- See this link for help using MYOB Categories
- Cannot split one transaction across two Categories/Divisions
- Once a transaction is paid it is not possible to adjust or fix a Category allocation
- Reporting from MYOB by Category is limited (Flexible reporting by Category using BI4Cloud)
- Cannot budget by Category in MYOB (it is possible to Budget by Category using BI4Cloud)
- Very inflexible so clients often abandon this method
6. Consolidate - Use multiple MYOB files and Consolidate them together
You may run each Division as a separate MYOB file. Using BI4Cloud Business Intelligence you are now able to Consolidate multiple MYOB files together