Top Pitfalls to Avoid in Reporting from Your Chart of Accounts

Here at ACBM, we are passionate about helping companies gain business insight with technology. This involves good data, good visibility, and good reporting that leads to good decisions. That only happens when the underlying data is accurate and the way it is organized is set up correctly. 

Garbage In, Garbage Out Is a Real Problem

Implementing Cetova Reporting Software Can Reveal Areas for Improvement

One of the surprising benefits of implementing the Cetova reporting platform is that it often uncovers data issues in the source systems. This often shows up when the initial reports created in Cetova don’t match the control reports that were provided. Nine times out of ten, it turns out that there is a hidden issue with the control report that needs to be addressed. 

Unfortunately, this also means that businesses may have been accidentally reporting data incorrectly…often for years. That can be a scary realization. Sometimes, the error doesn’t really make a material difference. For example, even though account information may have been put in the wrong bucket, the end outcome might be the same when consolidated. However, there are times when it is a very significant problem because the data is incorrect in a way that impacts compliance in financial reporting as well as business decisions.

Let’s look at 3 pitfalls that can harm your ability to get good reports from JDE.

Pitfall #1 Misclassifying Data by Accident

Imagine that a company has been accidentally misclassifying 20-30% of their non-recurring revenue as recurring revenue. Such an error can make a material difference in everything from cash flow forecasting to the valuation of the company. Believe it or not, this kind of mistake can easily happen if a chart of accounts isn’t set up in a clear and correct manner to identify and classify those transactions. For example, when classification and reporting is done at the transaction level instead of the account level, this can lead to all kinds of discrepancies with data.

This is why cleaning data is extremely important. No technology will give you accurate real-world reporting numbers if the underlying data is flawed. Auditing the specifications of your reporting can go a long way toward helping you identify issues with how your data is classified, especially if your reports were built years ago based on an outdated chart of accounts. Take the time to deep dive what data you are really trying to see and double check that it is being organized correctly.

Pitfall #2: Reporting at the Wrong Level in the COA

Having accounts set up at either a too high or too low level of detail causes issues with reporting. If the level of account data is too high, you have to go fishing through the underlying raw report data for the data you really want. If the level of details is too granular, that’s also a problem. A global multibillion dollar company doesn’t need to be bothered with minutiae about an account that has $100 in it. That wastes time and makes reporting inefficient. 

The best practice to avoid both these issues is designing your chart of accounts so that you are transacting at the level of the account that you need for budgeting and reporting purposes. At ACBM, we always structure COAs for our clients with reporting in mind.

Pitfall #3: Putting Information in the Wrong Fields

This is often an issue we find with reporting from a Chart of Account that was designed with shortcuts so it can’t really grow with the company. For example, we often see people trying to capture organizational type information in the subsidiary field. This is usually done with the idea that it will make it easier to see specific types of relevant information. 

However, when data is stored and organized for short term convenience instead of long-term accuracy and visibility, it causes more problems than it solves. Ultimately, just because you CAN use fields and structures in ways that are unique to your current business situation doesn’t mean you should. Yes, you can use category codes or make changes at the individual report level to make things work. But, you will end up with more exceptions than rules and this will lead to a chaotic Chart of Accounts and discrepancies in reporting. Making sure to capture the right information in the right field up front will save a lot of headaches and frustration in the future.

Your COA and Cetova Reporting Can Work Together for Exponential Results

A properly designed Chart of Accounts and Cetova Reporting for JDE will each work on their own to help your people get better results with far less effort. The increases in efficiency and accuracy are immediate and long lasting, especially when it comes to shortening the close cycle. Even better, Cetova makes it possible for end users to customize their own reports so everyone gets more of what they need faster. However, when you pair a well-designed COA with Cetova, the combination is exceptionally powerful. We see exponential gains when both of these are deployed together. 

Want to get help with your Chart of Accounts design or Cetova reporting software? Schedule a discovery call today.