Set up derived financial hierarchies

  • 4 minutes

Derived financial hierarchies allow you to create additional categories that are like dimensions, and then associate them to real dimension values; which are then available in Power BI to report and analyze upon.

Derived dimensions

When you are in General ledger > Chart of accounts > Dimensions > Financial dimensions, you can select the Derived dimensions button.

Screenshot of the Financial dimensions page with the Derived dimensions button highlighted.

By using this feature, you can set multiple filters for the existing dimensions, and by selecting the Add segment button, you can include additional financial dimensions.

Screenshot of the Add segment button selected.

The value of the financial dimension filter will derive the values you set for other dimensions to allow you to default financial dimension values in Finance.

Derived financial hierarchies

To meet Common Government-wide Accounting Classification (CGAC) requirements, public sector organizations can use derived financial hierarchies to collect and analyze posted transaction data for specific main account numbers, full account numbers, and financial dimension values.

You can use derived financial hierarchy filters to collect information about the posted transactions that contain account numbers and financial dimension values for the nodes of a category hierarchy.

Derived financial hierarchies help you determine what information you should capture as a dimension value and what you should assign to a category hierarchy. Derived financial hierarchies help you set up accurate structures when posting and reporting financial data.

Typically, category hierarchies are set up to classify transactions for reporting and analysis based on the financial dimensions in an account structure at the time of posting. However, by using category hierarchies with a Derived financial hierarchy category type, you can create filter rules that create financial categories and dimension values that are not part of the account number. The financial categories and dimension values that are defined in the filter rules are derived from the account number dimension values that are used in the posted transactions.

Derived financial hierarchies give you a more flexible approach to grouping transactions for analytics. They allow you to categorize transactions without having to expand the account structure to include the additional categories or dimensions you want to track.

Scenario

An organization has an employee wellness program and an employee education program. These programs are not associated with financial dimensions. To collect account numbers that are used in the posted transactions for these programs, you could perform the following tasks:

  • Set up the category hierarchies and the derived financial hierarchies - Create a category hierarchy named "Employee programs," a parent node named "Programs," and two child nodes named "Employee wellness" and "Employee education." Assign the Derived financial hierarchy category type to the Employee programs category hierarchy. Associate the Employee programs derived financial hierarchy with the legal entity.
  • Set up filter rules - Use the Derived financial hierarchies page to create filter rules for the main accounts and financial dimension values associated with the Employee wellness and Employee education nodes in the Employee programs derived financial hierarchy. Tip: To enter more than one financial dimension value in a filter, use a comma without spaces as a separator. For example, enter 100,110 or Benefits, Insurance.
  • Analyze posted transaction data - In the filter results, view account numbers and their account and financial dimension details.