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Accounting

Does DBA offer departmental accounting?

Most companies that ask this question are coming from an accounting system that offered the ability to designate departments in sales orders, PO's, and supplier bills in order to assess "profit centers" within the company. Typically, the department is identified with a segment on the end of a core account.

This departmental structure is common to "GL-centric" systems that were designed originally as financial accounting systems and were expanded over time with operational applications. In such systems, the operational applications must conform to the needs of the general ledger, which remains the prime repository of analytical information.

DBA, on the other hand, is an "operational-centric" system where the operational applications of sales, jobs, inventory, and purchasing function without any direct interaction with financial accounting. The General Ledger is designed to fit the needs of the operational applications, not the other way around.

Departmental accounting is not suited for manufacturing

Departmental accounting is not suitable for manufacturing accounting. Most of your manufacturing costs are comprised of labor and factory overhead, which are absorbed into the cost of your products during job processing. Labor hours and overhead allocation are automatically tracked by work center without having to specify a department at the PO or job level.

A manufacturing company is not a collection of separate departments, each with its own revenues and expenses. The factory is a single entity with inter-dependent work centers. The General Ledger is not designed for manufacturing analysis other than giving you the total value of inventory and WIP and the total cost of direct labor and factory overhead. More advanced analysis such as product costing, work center utilization, overhead allocation, labor productivity, and other measures are achieved outside the General Ledger via manufacturing reports and inquiries.

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