This topic introduces the concepts related to chart of accounts in Q360.

Note: decisions you make from this topic are reflected in your Chart of Accounts (COA) definitions in Core Setup workbook (as referenced in your implementation project).

Account Numbers

A Q360 GL account is uniquely identifiable from your chart of accounts structure.

A GL account number

• Typically consists of 4-6 digits
• Starts with a digit that represents the classification of accounts types it belongs to (e.g., 4 for income accounts)

Account Type

Each GL account is allocated to one of the following account types:

• Asset
• Liability
• Equity
• Income
• Expense

Bank Flag

An account of type Asset or Liability can be flagged as “Bank”. This is used in the bank reconciliation process to select an account to perform a bank or credit card reconciliation to their respective statements.

Fixed Operational Cost Flag[1]

Any account considered part of your on-going fixed operational expenses can be flagged accordingly, which will help in cashflow forecast reporting in Q360.

Job Cost Type and Job Cost Class

Any Expense-type account used in contexts related to customer-facing jobs (e.g., projects, service calls) should typically be tagged with one of the following Job Cost Types, which aids in categorizing the cost in job profitability analysis:

• COGS (equipment and materials)
• LABOR (own internal labor)
• BURDEN (burden of own internal labor)[2]
• SUBCONT (subcontractor services)
• MISC (miscellaneous)

Moreover, if you are going to use Q360’s advanced Job Cost Classification method of revenue recognition[3], any Expense-type account used in contexts related to customer-facing jobs (e.g., projects, service calls) can must be tagged with one of the following Job Cost Classifications, which facilitates calculating percentage of cost complete and consequently earned revenue:

• MATERIAL
• LABOR
• SUBCON
• MISC

Key GL Accounts

Certain accounts in your COA are considered Key GL Accounts. These accounts are designated in the setup of each trading entity in Q360 (Company Setup). From a usage standpoint, key GL accounts fall into 3 types:

1. Default Accounts: used in absence of more specific overriding accounts
2. Designated Accounts: can’t be overridden but accept manual entries
3. Controlled Accounts: can’t be overridden or written to, reconciled on month end

For more information, refer to Key GL Accounts and Account Lookup Rules topics.

Note:  Users expecting to do business in multiple currencies should also view Multi-Currency and Foreign Exchange (FX)

Q360 Segmentation (a.k.a. Sub-Accounts)

A powerful feature of Q360 that invites re-thinking of existing income or expense accounts is called Account Segmentation. A segment is a two digit code. There are two segments in Q360: branch and department.

When Q360 posts an income or expense journal entry (JE), it automatically affixes 4 digits to the GL account number used for posting: 2 digits for the branch cited on the order, and 2 for the department. While branch segment is understood to refer to a physical branch, recall from Sale Types and Departments topic that a “department” can refer to a profit center.

Therefore, using power of segmentation, a single GL account can be designated to record transactions for multiple branches or profit centers. For example, account 4001 can be designated as Equipment/Materials Revenue, and depending on the job, it will receive a JE posting such as CR 4001-0103, where 01 segments refers to your head office branch, and 03 refers to Access Control business line.

When producing an income statement in Q360, you have the option of running the report for, all, one or multiple segments.  Additionally, a Combined Income Statement report plots your income and expense accounts against columns representing your various branches or departments using data derived from your automatically segmented journal entries.

[1] Internally referred to as REPORT10FLAG

[2] Not typically used, unless it’s decided to use a different GL account for burden postings than the labor expense account.

[3] For more information, refer to topic of Revenue and Cost Recognition in Q360.