The reference number feature is designed to enhance the size and flexibility of the Costpoint account/org structure. You can use reference numbers for two distinct purposes. First, you can use them as an extension of the 15-character account and 20-character organization (org) that are the keystones of Costpoint's financial architecture. Second, you can also use them to provide flexibility in the presentation of General Ledger and Financial Statement reports. In this capacity, you can define alternate reporting structures as reference numbers and link them to existing account/orgs to provide alternate cost groupings. The use of reference numbers is optional.
Two reference number fields are available: Reference Number 1 (also called "Ref No 1" or "Ref 1"), and Reference Number 2 (also called "Ref No 2" or "Ref 2"). You can use either reference number either for alternate reporting or for data entry. Although it is technically possible for either reference number to serve as both an alternate reporting structure and a data entry field concurrently, this would cause confusion, because reports showing different information would contain the same heading information. For this reason, we strongly recommend you use a single reference number either to store an alternate reporting structure or for data entry. Each reference number field is 20 characters in length. Each reference number has breaks (periods) between the user-defined levels; however, these breaks must be taken into consideration when calculating the field size. For example, a reference structure of "XX.XXX.X" uses eight of the available 20 positions - six characters for the actual numbers at the three different levels, and two periods for the delimiters between the levels.
Reference number fields are available in data entry screens throughout Costpoint. Budgets by reference number and account are also available. The balance of this Special Topic contains two main sections, organized as follows:
Reference Numbers - Reporting vs. Data Entry Use
Initialization Requirements
The reference number fields provide powerful capabilities that you can use in a variety of ways as defined by your company. You can use each reference number for data entry or to store an alternate hierarchical structure. The latter is sometimes referred to as an "Alternate Reporting Structure" or sometimes as an "Alternate Org" throughout the Costpoint documentation. ("Alternate Org" in the Costpoint documentation can also refer to Reorganization. Note that if you need alternate reporting only by alternate organization, instead of by both account and org, it may be more efficient to use Reorganizations for your alternate reporting. See the heading "Alternate Organization - Reference Numbers vs. Reorganizations" later in this special topic for more information.)
Throughout Costpoint, costs are accumulated and tracked by the use of the Account, Organization, Project, and, optionally, by Reference 1 and/or Reference 2. When defining the hierarchical structure of the organization, give consideration to the company levels and the detail that must be reflected on financial statements. Often, however, financial reports are required to reflect multiple scenarios or multiple levels of internal groupings. In certain instances, it is possible to "build" the different report groups into the levels of your organization. You can then run the financial reports at or rolled up to different org levels. However, it may not always be advantageous or even possible to design your organizational structure for these reporting needs.
In this instance, you can use reference numbers as an alternate reporting structure. You can run financial statements and other G/L Reports by alternate reporting structure and "roll up" information from lower levels within a selected alternate reporting structure.
To use this feature, create user-defined alternate structures using reference numbers, and link Account/Org combinations to the alternate structure in which they belong. Alternate structures may contain multiple levels within the 20-character limit of the reference field. You can link account/org combinations to multiple alternate structures, depending on reporting requirements. You can link account/org combinations to alternate structures at any time before running financial reports. Balances from account/orgs that belong to the selected alternate structure are included in the financial reports.
It is also important to keep alternate reporting in mind when designing your organization. If you know of certain groups, regions, cost centers, etc. that may require alternate reporting, these elements must exist in your organization. You CANNOT use alternate structures to report costs at lower levels than are tracked through your account/org setup. For example, assume a three-level org exists. Level one is the overall company level. You use level two to differentiate business segments. You use level three to track costs by region, each of which covers multiple states/provinces. You want to print financial reports by state/province. Currently, there is no level in this organization to identify costs at this level. Therefore you cannot use an alternate reporting structure to group these costs. In this situation, you need to use reference numbers for data entry to accumulate these costs.
However, you can use alternate reporting to roll up or summarize costs at a higher level. Again, assume a three-level org exists. You use level one to track costs by business segment. You use level two to track costs by region. You use level three to track costs by office. Assume that a director manages more than one office. You can set up an alternate reporting structure to group offices by director and print financial reports for each director. You could also group the offices by a different alternate reporting structure to print reports by state/province, as desired, in the previous example. In this case, reporting by state/province is possible because each office is located in only one state/province.
You will also use reference numbers if you must track information for entities that are not incorporated into the organization or account structure. Often, this situation exists when fields are needed in addition to, or outside of, the account and org to capture costs. For example, assume a three-level org exists. Level one is the overall company level. You use level two to differentiate business segments. You use level three to track costs by region. Assume costs need to be accumulated and reported by product line. You cannot use an alternate reporting structure to obtain this information because it is not captured within the existing account and organization.
In this instance, you can use Reference 1 and/or Reference 2 for data entry. When you use reference numbers for data entry, the system enters transactions by reference number and by account/org and project. No linkage occurs between account/orgs and reference numbers; this is accomplished at the time of data entry through the reference number selected. There is no "mapping" of reference numbers to accounts or account/org combinations, as there is when you use reference numbers as alternate reporting structures. You can use any valid reference number with any valid, active account/org combination during data entry. Additionally, you must initialize default reference number tables in all modules for journals that must update the Reference Summary table to ensure that posting programs update the correct reference number.
When you use reference numbers for data entry, posting programs update the Reference Summary table to contain amounts posted by account and reference number. The G/L Detail and Transaction History tables for each module also contain the reference number to which each transaction is posted. It is imperative that you initialize the reference numbers throughout the system before data entry, so that these tables contain accurate balances. You can also initialize beginning balances in the Reference Summary table.
It should be noted that the Reference Summary table is similar in design to the Financial Statement Summary table. Both contain beginning balances and amounts and hours by fiscal year and period. The Financial Statement table stores this information by Account/Org, while the Reference Summary table stores balances by Account/Reference Number. The organization is not stored in the Reference Summary table. When you run financial reports by reference number, balances from the Reference Summary table are printed for the selected reference number. If the initialization of this table is incomplete or not properly timed, transactions may exist in the Financial Statement Summary table but not in the Reference Summary table. These transactions will not be reflected on financial reports run by reference number.
When setting up an alternate reporting structure, you need to analyze whether it is best for your company to use reference numbers for alternate reporting or to use reorganizations. There are advantages and disadvantages to each approach.
You can use reference numbers to link your alternate reporting structure elements to specific account/org combinations, which can provide a great deal of flexibility. More G/L reports are available by reference number alternate reporting structures than by reorganization. However, in order for all account/org combinations to be mapped properly, you must maintain the reference structures whenever an account or an org is added to the system. Setting up all of the reference/account/org links is more complex, too, simply because of the potentially large number of account/org combinations.
Reorganizations are linked only to orgs. This can make them simpler to use and to set up, because the added complexity of dealing with all account/org combinations is avoided. You need to maintain reorganizations only when orgs are added or changed. However, this means that all discrete reporting units must already be captured in the existing organization structure. Reorganizations allow you to roll your existing organization elements up in a different fashion; they do not allow for account/org matrix redesign. Fewer reports are available by reorg than by reference number alternate reporting structure.
Neither method provides alternate storage of summary data. Both are reporting tools that are used in conjunction with the existing Financial Statement tables at the time reports are run. For either method, any linkage between the alternate reporting structure and account/orgs or orgs that exists at the time reports are run will be used for reporting.
Both of these methods, however, have reporting limitations. Not all reports in the system are available by either of these two alternate reporting methods. Make sure you thoroughly evaluate your reporting options before deciding to use either reference numbers or reorganizations for reporting. Ultimately, no alternate reporting method can completely take the place of a well-designed and implemented organization structure.
The following is a step-by-step guide to initializing reference numbers.
If you use a reference number as an alternate reporting structure, you must first use the G/L Settings screen to define the length of the first segment of the reference number. The length of the first segment must be consistent for all reference numbers. Once you have entered a reference number, you cannot change this length.
The second step is to define your reference structure in the Define Ref Structures screen. Keep in mind the levels at which you need to see information. Do you need to display data at multiple levels for detail and roll up reports, or can your structure be relatively flat? Enter the top-level Reference No and Name. This ID must be equal to the length defined in the G/L Settings screen. In this screen, you must also define the number of levels and the segment length of lower-level reference numbers. Do not select the Use in Data Entry checkbox in the Define Ref Structures screen.
The final step is to enter individual Reference Numbers (or Alternate Reporting Structures). Use the Maintain Ref Elements screen to set up each reference number. You must use the Link Reference to Acct/Orgs subtask to link each reference number to the Account/Orgs that need to be "mapped" into it. This process updates the ORG_ACCT_REF_STRUC table. This table is linked to the Financial Statement Summary table any time reports are run by alternate reporting structure to identify the accounts/orgs associated with the selected alternate reporting structure. Therefore, you must update this table before running these reports. Please note that you can also use the Mass Link Ref/Account/Orgs and the Maintain Ref/Account/Org Links screens to link Account/Orgs to reference numbers.
If you elect to use a reference number for data entry, the most important part of the initialization process is to determine your reporting needs. You gain an advantage by using reference numbers for data entry because of the additional information provided by the Reference Summary, G/L Detail, and Transaction History tables. Ask yourself exactly which information you will use to update these tables and the uses you will have for this information. Think of the final product (a report), the information you need to see on that report, the journals that contain this information, and the method by which these costs are captured. These processes, and the manner in which they update the Reference Summary table, should become the primary focus of your initialization strategy. The exact data contained in the Reference Summary table is critical, because this table will become the primary reporting repository for your financial reports.
For example, you may need to see only revenue and cost information by reference number. Or maybe you need only to see sales numbers by product. Perhaps you plan to provide full financial reporting by reference number and therefore need all journals to post by reference number. You need to determine the information you need to store in the Reference Summary table before planning your initialization, so that only that data updates the table. In the first example in this paragraph, only revenue and expense data needs to be stored by reference number. Therefore, you do not need to initialize accrued sales or payroll tax liabilities with default reference numbers, because this data is not used. In the second example in this paragraph, only sales information is required. Therefore, you do not need to initialize default A/P, Payroll, or Cash Receipt Account/Reference Numbers, because you do not need this data posted to the Reference Summary. You can, of course, update the Reference Summary table with all postings from all modules. However, the initialization process then becomes far more time-consuming, and the table becomes much larger.
Next, you must define the length of the first segment of the reference number in the G/L Settings screen. The length of the first segment must be consistent for all reference numbers. Once you have entered a reference number, you cannot change this length. Enter the headings to be used in data entry in the fields marked as such.
The next step is to define your reference structure in the Define Ref Structures screen. Keep in mind the levels at which you need to see information. Do you need to display data at multiple levels for detail and rollup reports, or can your structure be relatively flat? Enter the top-level Reference No and Name. This number must be equal to the first segment length defined in the G/L Settings screen. In this screen, you must also define the number of levels and the segment length of lower level reference numbers. Be sure to select the Use in Data Entry checkbox in the Define Ref Structures screen. Select the heading you wish to appear in data entry screens. This heading must already exist in the G/L Settings screen.
Next, use the Maintain Ref Elements screen to enter each reference number you wish to use. DO NOT link the Reference Numbers to Account/Orgs.
If beginning balances (amounts and hours) exist for reference numbers, initialize these balances in the Maintain Reference Beginning Balances screen. Initialize only the beginning balances as of the beginning of the fiscal year. If you are initializing later in the fiscal year, enter reference number beginning balances through journal entries.
Initialize default accounts in settings and maintenance screens throughout the system. For example, if you plan to use reference numbers to track Accounts Receivable discounts and finance charges associated with different types of customers, you must initialize the Default Accounts subtask of the Maintain Customer screen in Costpoint Accounts Receivable. The programs that accrue finance charges and post customer billings use this table to post these amounts.
Depending on your use of the reference number, you need not initialize all settings and maintenance screens. In an earlier example, Reference Number 1 was to be used in data entry for tracking sales by product line. In this example, you are interested only in revenue amounts. Therefore, the only data that you need to post to the Reference Summary table is sales information associated with a particular product. In this situation, you must initialize the default sales account in the Customer table with reference number data, because this data is used for the posting of product sales. However, you are not interested in seeing balance sheet information, such as payroll or sales tax accruals for this product line. Initialization of the tables that control the posting of payroll and sales tax becomes optional in this instance.
The following is a list of maintenance screens and settings that you can optionally initialize for reference numbers used in data entry:
Cost Pools (Costpoint Cost and Revenue Processing): Default Accounts, Allocation Accounts, Cost and Receivable Variance Accounts
A/R Settings (Costpoint Accounts Receivable): Default Accounts
Maintain Transfer Accounts (Costpoint Accounts Receivable)
Project Unit Pricing (Costpoint Project Setup: Default Accounts
Price Catalogs (Costpoint Product Definition): Default Accounts
Maintain Customer (Costpoint Accounts Receivable): Default Accounts
Voucher Settings (Costpoint Accounts Payable): Default Accounts
Maintain Vendors (Costpoint Accounts Payable): Default Expense Account
Taxable Sales Account (Costpoint Billing)
Payroll Reference Number Settings (Costpoint Payroll)
Basic Employee Info: Default Accounts (Costpoint Employee)
Employee Project-Acct-Grp TS Defaults (Costpoint Labor)
Labor-Grp Project-Acct-Grp TS Defaults (Costpoint Labor)