Departmentalized Financial Statement

The accounting system allows the creation of a Departmentalized Financial Statement. This report prints a separate Income Statement for each department, as well as a Consolidated Income Statement with totals from all the departments. In order to create a departmentalized statement, the following conventions should be followed.

Account Number Segments

First, determine how many digits will be needed to specify the department number. If fewer than 10 departments will be needed, one digit is all that will be necessary. If fewer than 100 departments will be needed, a two-digit number will suffice.

From the Setup menu, select Accounting Options then General Ledger Setup. The following screen will appear:

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Place a check in the Departmentalized Income Statement box and indicate that the Segment Containing the Department Number is segment 2. Now specify correct number of digits in Segment 1 and Segment 2 of the account number. Segment 1 will contain the base account number and segment 2 will contain the number of digits needed to specify the department. Here is an example:

In this example, Segment 1 (the base account number) is four digits long. The department segment is Segment 2, and it is one digits long. The number in the first segment represents the base account (i.e. 4110 is Labor Costs) and the number in the second segment represents the department (i.e. 2 is the Construction department).

Creating Departments

From the General Ledger menu, select Design Financials. The following screen will be displayed:

On the left hand side of the screen is a box which displays the departments which have been created. Using the Add button, create departments and assign them a department number. A screen like the following will come into view.

Be sure to create a consolidated department.

Designing the Chart of Accounts

Follow the pattern displayed above to create a General Ledger chart of accounts. In the Balance Sheet, all five account number digits can be used because the Balance Sheet is not departmentalized. In the Income Statement, the accounts must have a department segment of "01", "02", "03", or "00" for the Consolidated Statement.

Here is a small example:

The list of accounts will grow using this pattern until an entire chart of accounts has been created.

Design the Financial Statement

The most crucial part of the process is designing the income statement. Follow the instructions in the Design Financial Statement help topic with these few important notes in mind.

•Create one Balance Sheet. This includes sections for Assets, Liabilities, and Equity.

•Create one Income Statement for each Department. This includes sections for revenue and expenses.

•Create a Consolidated Income Statement. This includes sections for revenue and expenses. The values on this Income Statement are a total of the values on all combined Departmental Income Statements.

From the above account setup, the content for the three department income statements and the consolidated department statement would be as follows:

Notice the balances on the Consolidated statement. They are made up of the totals of the balances of the accounts with the same base number on the individual departmental income statements.