Compiere is by design a financial data warehouse.
Old applications often offer a separate financial data warehouse to allow to use accounting data for decision making. The general approach is to transfer the (compressed) sub-ledger data to the general ledger and the in an additional step "enrich" this summarized GL info and store this in a financial data warehouse.
Compiere maintains all data on the lowest level of detail. This allows maintaining parallel summarization hierarchies for reporting. Example: you can maintain the old organization structure and the new one in parallel and use both of them for reporting. For your reporting, you can select from predefined accounting elements in addition to two user defined list and two user defined references.
The ready to use dimensions include owing organization, transaction organization (e.g. cost center), business partner, product, sales region, activity (for activity based costing), location (from and to - enabling regional value flow analysis), project (including phase and task), marketing campaign. You can create multiple summarization structures for any of the accounting elements (i.e. dimensions for data warehousing).
Compiere does not require the data entry person to select/enter accounting information nor accounts. Example: the sales region can be derived from the sales rep - the marketing campaign could be derived from a coupon/voucher. As data entry personnel is motivated to finish the transactions as fast as possible (not necessarily to provide detailed information for management reporting), all information is derived from the transaction and default accounts.
In a traditional system, you might have two accounting elements: "Organization - Account" You might create a transaction like 01-163029 (Organization: HQ, Account: Sales for toys in the south east)
In Compiere, you could set up the following accounting elements:
"Organization - Account - Business Partner - Product - Sales Region"
The values of the account combination would be directly derived from the document (e.g. invoice):
HQ-1600-Joe-15" Doll-SW
(Organization: HQ, Account: Sales, Business Partner: Joe, Product 15" Doll, Sales Region: SW)
No need for an order entry person to select any account or sub account. You could create a regional hierarchy for business partners (in parallel to the business partner hierarchy by distribution channel). Also if you want to know later differentiate the revenue for toys to dolls and action figures, you can do that anytime.
There is also no need for sub-accounts (although Compiere supports sub-accounts for government applications). Usually, it is far better to use the detail information derived from the transaction rather than relying on someone entering the correct sub account (e.g. the sub-accounts to the revenue account could be the sales regions).
In summary
- Compiere stores (accounts) all data at the lowest level of detail (the basis of a financial data warehouse).
- You can define an unlimited number of hierarchies/structures for each of the 20+ potential accounting elements/dimensions.
- The values for the accounting elements is derived from the transactions - resulting in significantly higher information quality - with shorter time to complete the transaction.
- No need for sub-accounts or over-detailed accounts - the Compiere accounting dimensions provide much more reliable information derived automatically, rather than hoping that the right (sub-)account is manually selected.
