We (an international media firm) currently utilize our general ledger (the only function of an ERP system we use) to tag all transactions with a department, location, etc. in order to pivot information that is fed into
Thoughts on leveraging G/L for budgeting (departmental, location, etc.)
Answers
This will depend on how the organization’s hierarchy is set up. FP&A should track based on what it is fed from accounting so it is important for accounting to properly code their transactions. With a properly segmented chart of accounts and all revenue and expense items properly coded to the right segments it should be fairly straight forward to pull data from the G/L into the planning, budgeting and analytics software. You have to make sure that the reporting hierarchy in the budgeting software matches the actual chart of accounts in your G/L.
The new generation of budgeting software will even allow you to seamlessly interface to the G/L so as soon as an accounting period is closed, your actual accounting data will be available to do analytics on. With a matching budget data format, FP&A will quickly be able to see any variances from budget and depending on which G/L software you use even to drill down (back) into the actual G/L transactions to be able to investigate any variances and their root causes.