Creating an international, group chart of accounts
When initiating the standardization or consolidation of a global ERP system, it is necessary to replan and define the structure of the chart of accounts. The definition has to include ranges within which local modifications are possible. As our experience shows, for most of accounts the same standard range can be specified, notwithstanding the country where the ERP system – Microsoft Dynamics NAV – is being implemented. However, the global chart of accounts has to include country-specific account ranges for local modifications. For example, local modifications might be needed on VAT accounts.
Local regulations for VAT are very country-specific; which results in VAT account discrepancies in various countries; nevertheless the posting group remains the same for each country. It is also applicable to bank accounts. In some countries such as Poland, companies hold a variety of bank accounts in various financial institutions. Commonly, for each bank account a separate account is created in the general ledger. Thus, companies operating in countries such as Poland use multiple bank accounts in their chart of accounts. This fact has to be taken into account at the stage of Global Template development when a group chart of accounts is defined. Otherwise, its implementation in a local subsidiary might not be possible. The standardization of specific ranges limited to the level of posting groups meets the requirements of headquarters. As far as country-specific accounts such as bank accounts are concerned, the main focus of headquarters is the possibility to view available cash in each subsidiary. Such information can be easily retrieved (regardless of the number of bank accounts) from the chart of accounts that has been created according to the mentioned guidelines. The headquarters want to view balances which means the overview of account group. It remains unchanged for each subsidiary. Therefore, differences in the number of banking accounts between subsidiaries do not influence the consolidation. For more information onfinancial consolidation in the ERP Microsoft Dynamics NAV, please see our website.