Considerations in defining account categories
Account categories can include up to five alphanumeric characters. Consider these tips when defining account categories:
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Use numeric account category names to make data entry easier.
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Use a consistent numbering scheme to make selection of ranges of account categories for reports, burdens, allocations, and other processes easier.
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Consider the relationship the account categories have with General Ledger accounts, and how it may impact reporting and reconciliation.
Note: Account categories are left justified for selecting and sorting, so if you use numeric account category names, then they must contain the same number of digits. For example, account categories 500, 4100, and 05900 are sorted as: 05900, 4100, 500.
These examples demonstrate possible relationships between accounts and account categories. It is necessary to maintain accounting unit balances in activities to help with reconciling activity costs to accounts associated with multiple accounting units.
Example 1
In this example, there is one General Ledger account for project labor, but there are multiple labor-related account categories in Project Accounting. This provides more granularity for reporting within the project. If labor costs are to be reconciled with General Ledger, costs for all three labor account categories must be totalled and compared with the balance in the General Ledger Project Labor account.
| General Ledger account | Account categories |
|---|---|
| Project Labor | Labor - Regular |
| Labor - Overtime | |
| Labor - Project Management |
Example 2
This example shows a one-to-one relationship between account categories and accounts. Reporting on all three types of labor is accomplished in General Ledger or Project Accounting. Regular project labor can be reconciled to the General Ledger account for regular project labor, overtime labor to the General Ledger account for overtime project labor, and so on.
| General Ledger account | Account categories |
|---|---|
| Project Labor - Regular | Labor - Regular |
| Project Labor - Overtime | Labor - Overtime |
| Project Labor - Management | Labor - Project Management |
Example 3
This example shows a defined account category that relates to multiple accounts in General Ledger. You need to reconcile labor costs from Project Accounting to the total of the labor-related General Ledger accounts.
| General Ledger account | Account categories |
|---|---|
| Project Labor - Regular | Labor |
| Project Labor - Overtime | |
| Project Labor - Management |