Chart of Accounts, Dimensions, and Postings
Since Kaunt sits on top of an ERP-system, it does not need an exact representation of the Chart of Accounts (COA). Instead, it takes a simplistic yet flexible approach to representing the COA and all the dimensions needed in the accounting process. This article explains how we think about the COA at Kaunt.
Chart of Accounts and Dimensions
In Kaunt, the entries in the COA and all additional dimensions are represented as a set of dimensions and dimension values. For example, there is no distinction between e.g. a G/L account and a cost center – both are considered equal dimensions.
All dimensions have a name and a set of values that can be assigned to that dimension. For example, a G/L Account dimension can be assigned all valid G/L accounts, while the Cost Center dimension can be assigned all valid cost centers.
Automatic Generation of Dimension Values
Kaunt automatically generates the set of dimensions and dimension values based on the posting data. The dimensions and dimension values are created from the distinct dimensions and dimension values seen in the postings. In case a dimension or dimension value is no longer valid, it can be closed using the Dimensions or DimensionValues endpoints, respectively.
Combinations of Dimension Values
In most chart of accounts, there is a restriction on which combinations of dimension values are valid. Kaunt only considers combinations of dimension values which have historically been used for accounting. Hence, there is no need to explicitly provide information about valid combinations of dimension values to Kaunt.
Example 1: GL Accounts and Custom Dimensions
The following example shows a common setup with a G/L Account and a number of dimensions. In this case, the Approver is also considered a dimension and Kaunt will attempt to predict it.
| GL Account | Tax Code | Department | Cost Center | Approver |
|---|---|---|---|---|
| 1000 | 2221 | Engineering | R&D | PPT |
| 1001 | 2230 | Engineering | R&D | PPT |
| 1001 | 2230 | Engineering | R&D | JNN |
| 1002 | 2235 | Legal | HR | LOE |
| 1207 | 2221 | Legal | Finance | AJ |
Example 2: GL Accounts and Catalog Items
Sometimes, there are multiple types of accountings that can be applied. For example, in the case of inventory management, it may be possible to account both GL Entries and Catalog Items. To support such use cases, the Type can be represented as its own separate dimension with the relevant value assignments to dependent dimensions.
| Type | GL Account | Item Code | Tax Code | Department |
|---|---|---|---|---|
| GL | 2221 | 2221 | R&D | |
| Item | 5161 | R&D | ||
| Item | 8593 | R&D | ||
| GL | 2235 | HR | ||
| GL | 2221 | 2235 | Finance |
Postings
Posting data is the "source of truth" for the Kaunt algorithm. The postings bridge invoices with their assigned dimension values. As previously mentioned, the dimensions and dimension values are generated based on the postings.
To allow Kaunt to map invoices and postings, it is very important that there is a reference on the posting to the invoice whenever such a reference is possible. Only postings which can be mapped to lines on a posted invoice can be used for training.
Note that the postings may or may not be the general journal, depending on the dimensions used. In some cases, there are Kaunt dimensions which are not stored in the general journal but are necessary for accounting, e.g. Approver. In this example, the approver information must be added to the postings provided to Kaunt.