In Sage 50 Premium Accounting and higher, general ledger account segmentation allows you to segment your chart of accounts, and also allows you to select segments to include on your report from the financial statement filter/options window.

The Sage 50 chart of accounts supports up to 15 alphanumeric characters, including separators which can serve as “spacers’ between account segments.

The example below will demonstrate:

The client is a design company for industrial machinery that also manufactures products based on those designs for their customers.

They have 3 business groups:

1. Planning & productivity.
2. Automation & product design.
3. Contract manufacturing.

There are cost centers within each business group:

Planning & productivity has only 1 cost center – 01.

Automation & product design has 2 cost centers – 01 and 02.

Contract manufacturing has 6 cost centers (products) –

01 – Flowtron.

02 – Drainco

03 – Marbilize.

04 – Shine-off.

05 – Glowfine.

06 – Excello.

Within contract manufacturing there are 2 breakdowns for major vs. minor products:

1 – major products are

01 – Flowtron.

03 – Marbilize.

06 – Excello.

2 – minor products are:

02 – Drainco.

04 – Shineoff.

05 – Glowfine.

Their chart of accounts is configured as follows:

First 4 characters = chart of account number.

Separator #1 is a dash –.

Next 1 character = business group.

Separator #2 is a dash –.

Next 2 characters = cost center.

Separator #3 is a dash –.

Next 1 character = major vs. minor.

Therefore their chart of account length is 11 and the configuration is:

XXXX-X-XX-X

Examples:

Account #7000-1-01-0 is as follows:

• 7000 is for salaries.
• 1 is for the business group planning & productivity.
• 01 is the cost center.
• 0 is for major vs. minor which is not necessary in this business group.

Account #7000-3-06-1 is as follows;

• 7000 is once again for salaries.
• 3 is for the business group contract manufacturing.
• 06 is the cost center for the product “Excello”.
• 1 is for major because “Excello” is a major product.

Account #7000-3-02-2 is as follows;

• 7000 is once again for salaries.
• 3 is once again for the business group contract manufacturing.
• 02 is the cost center for the product “Drainco”.
• 2 is for minor because “Drainco” is a major product.

This segmentation of the chart of accounts will allow for reporting by business groups, cost centers within business groups, and finally major vs. minor products within business groups.

These segments also work with the new Sage 50 Business Intelligence reporting functionality, allowing for the creation of very powerful customized financial reports.

TriStar has designed and implemented many segmentation plans for clients. Do not hesitate to contact us if you are considering deploying chart of accounts segments in your general ledger to improve your financial statement reporting capabilities .