23 March 2009

Weekly Dynamic: Control Account Management

Dynamics GP includes a little known feature named Control Account Management. It's part of the Purchasing module and its designed to let companies use a centralized AP account and then split their AP to divisional segments for financial reporting.

Imagine that you have multiple divisions and you want to centralize accounts payable for transactional efficiency but you need to show separate AP per division or business segment on your financial statements. This is what the tool is designed to do. As an overview, AP is managed centrally and then at month end, a routine is run that segregates the open AP by the divisional segment. A reversing journal entry is automatically created to remove items from the AP account and put them in the appropriate divisional AP accounts (the control accounts). With a reversing JE, the amounts then clear and return to AP for central processing after month end.

Debit AP
Credit Divisional AP
Credit Divisional AP

Debit Divisional AP
Debit Divisional AP
Credit AP

The setup is found in Tools->Purchasing->Control Account Management and essentially specifies which segment will be used to split AP, what divisions correspond to which control accounts and the batch info for the journal entries. Once setup is done, the Activation box should be checked to turn everything on. The screen is very straightforward and looks like this:

At month end a routine is run from Tools->Routines->Purchasing->Control Account Management. Clicking the report button shows how the open AP will be distributed based on open transactions and the expense account segments used in the AP transaction. Clicking the drop down button on the header shows the default batch information and allows changes including changes to the reversing date. Document type totals and distribution type totals are also available on their own tabs.

The segment ID drill down shows the full detail including vendor and voucher information. Clicking the icon next to amount owing, hides zero balance AP Control Accounts.

Saving the transaction allows generation of a summary and a detail report showing the specifics of the reassignment. Saved transactions can still be deleted.

Selecting Generate will generate the journal entry in the specified batch.

I can also see how this could be useful for entities maintaining multiple companies in one GP database via a segment in the chart of accounts. The Control Account Management functionality would allow separate AP reporting per company while simplifying day to day AP processing.