Definition
Analytical accounting is a parallel accounting layer that lets you allocate revenues and expenses across custom business dimensions such as departments, projects, or regions. It works alongside the general ledger: ledger accounts define the accounting nature of a transaction (e.g. “Rent expense”), while analytical accounting defines its business context (e.g. “Marketing team”).Key concepts
- Analytical plan: a dimension or axis of analysis (e.g. Department, Project).
- Analytical account: a value within a plan (e.g. Marketing, Project A).
Purpose
- Break down costs and revenues beyond the chart of accounts structure.
- Track performance by business unit without changing the general ledger.
Relationships
- Analytical allocations are attached to journal entry lines and invoice lines.
- Each folder can have one or more analytical plans, depending on the connector.