How to Compare Account Code Segments in Accounting Software

1. Extract charts of accounts from the systems you're comparing. You can print them out or get them in an electronic format. Many programs offer lists of accounts by segment, making it easier to understand the accounting code setup. For example, an account code may have the structure of 'xxx-yy-zzzz.' If the list of segments for 'yy' shows that the digits '01' is for California, '02' is for Arizona and '03' is for Oregon, then most likely the 'yy' segment relates to states where the company operates. You will be able to see what the segments relate to, but most likely you will not be able to see why the chart of accounts was created the way it was, unless the setup was documented and kept for review.
2. Compare segments by function, not by sequence they show up in an accounting code. For example, Firm A has the account code 'xxx-yy-zzzz,' while Firm B has the account code 'x-yyyy-zzz.' If the 'x' segment in each account code meant the same thing, such as departments, then it makes sense to compare them; however, if the 'x' in Firm A relates to types of sale, then it makes no sense to compare the first segments of both firms. The same logic applies to all segments.

3. Use a spreadsheet to compare accounting code segments. You can download the chart of accounts or a trial balance in a spreadsheet and use the 'parsing' function to separate the segments in each column to facilitate comparison and analysis. You can also data sort to analyze segments or use the filter or pivot tables For example, you could sort data by description to identify similar items within two sets of accounting segments and conduct a logical comparison. Using a filter in the worksheet, you can group and separate certain items easily.