Metric or calculated accounts may be created in the system and used in modeling

Description

This functionality allows the users to incorporate dynamically computed accounts derived from already existing data for enhanced decision-making capabilities.

Example Use Case

Scenario: Acme Corporation uses CPM software to assess its business performance. But the standardized financial and operational accounts provided by the system are not sufficient to fully capture the complexity of its global operations.

Solution: The Acme finance team leverages the calculated accounts feature of their CPM software. They create a calculated account called "Net Operating Capital" derived from underlying data like total assets, short-term liabilities, and cash. This calculated account allows Acme to introduce specific performance metrics which are in turn used as drivers in their forecast.

Considerations

Just about all systems can create a KPI, which is simply a formula for a specific metric. Calculated accounts however are not universally supported. They’re helpful in making the reporting process easier, and should be as simple as adding a new account to the CoA and associated a calculation with it. By doing so, the Calculated Account will show up on all reports where you reference the CoA. Without it, you’re left to dig for it manually.

Questions to Ask a Vendor

• Creation: How easy is it to create calculated accounts within your system? Can end-users with limited technical knowledge create and modify such accounts?
• Integration with Analytics: How effectively can these accounts be integrated with the other analytical features of your system for data visualization and reporting?