Segments

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Introduction

Segments are used to have a systematic separation of costs and revenues by unit, department or branch. When using the segments, you can have income statement divided by unit, department or branch, without creating specific accounts for each unit.
For example a museum can use the segments in order to know the income, the personnel expenses or the expenses for setting up each exhibit.

In the transactions, the segments will be linked to the account, unlike in Cost centers where transactions are instead specified by and are used for less structured categorizations (for example all the expenses of an event or purchases for a specific purpose).

Cost centers and segments can be used simultaneously.

Characteristics of the segments

  • Segments are accounts preceded by a colon ":".
  • Segments codes can consist of numbers or letters.
  • There may be up to 10 levels of segments.
  • The number of colons preceding the symbol for the segment indicates the number of level.
    • :LU segment of level 1
    • ::P1 segment of level 2
    • :::10 segment of level 3
  • For each level there may be an unlimited number of segments.
  • The different levels of the segment are independent of each other.
  • The segments do not have BClasses and do not have a currency symbol
  • The calculations for segments are done in the basic currency.
  • In the transactions, the segment follows the debit and credit account.
    It is not possible to record on a segment without having an account.
  • Account cards of the transactions on single segments can be obtained.

Setting up segments

The segments have to be configured in the Accounts table, Account column, at the end of the Chart of Accounts.

  • Insert an asterisk in the Section column in order to define the section relative to the segments.
  • In the Description column enter the Segments title.
  • Enter the description of the first-level segments, and in the Account column, insert ":"
    • Segments of the first level, entering an identification code for each one of them preceded by ":" (a colon)
    • The segments of the second level (and possibly the third level), like those of the first level, with the difference that in the Account column, the segment codes must be preceded by :: or :::, depending on the level.

empty or unassigned segment

Unassigned segment

If the debit or credit account is entered in the transactions, without indicating a segment, the value is registered in the "empty" or unassigned segment.
You may indicate a description of the unassigned segment, by entering the text ": {}" as an account in the Chart of Accounts,.

Segment balance

The segment is a subdivision of what is recorded on an account. The value of a segment is therefore always relative to an account, and to have the total of the segment you must therefore use the menu Reports → Accounting report or Enhanced Balance with groupsSection Subdivision , activate the Subdivision by segment option.

In the Chart of Accounts the balance of the segment will appear only if the segment is inserted in the recording using only the Debit or only the Credit account column. The balance will instead be zero (empty), if the segment is inserted in the Segment column or if it is used at the same time both for the Debit and for the Credit account. In this case the debit and credit amounts will be equal and will therefore cancel each other out.

Transactions

The segments are being entered in the Transactions table, followed by the main account from the account segment.

When you need to register a segment belonging to several levels, you must follow the main account from the first level segment and continue with that of the second level.

transactions on segments

Segment column

This column allows you to enter segments separately from the account.

  • The Segment column is hidden and if you want to use it it must be made visible via the menu Data → Columns setup.
  • The segments inserted in the Segment column are applied to the accounts used in the posting, in the Debit, Credit, VAT account columns, for which no segment has been specified,
  • You can use the Segment column and also insert segments in the Debit and Credit columns.
  • When using the Segment column the amount is recorded on the segment in both debit and credit, which is why the balance of the segment in the Accounts table will be zero.

distribution between segments

Movements between segments

The subdivision of costs is generally made for each individual accounting entry. However, there are situations where it is better to register costs in an account and then divide them into segments only at the end of the year. This is the case, for example, of administrative costs, which are divided in a percentage between the different sectors of the company.

Proceed as follows:

  • During the year, transactions are recorded, indicating the accounts in the Debit and Credit column, but leaving the segment blank, or by attributing the whole amount to a single segment.
    For example, all stationery costs will be posted without the segment.
  • At the end of the year, transactions are entered for the allocation of the portion of each segment to a specific cost or revenue account:
    • In the transaction, the same account is always posted in the Debit and Credit account columns.
    • The segments of origin (which may also be absent) and the one of destination are indicated.
    • For example, for the allocation of stationery costs to the various sectors.
      • There must be as many transactions as there are sectors.
      • For each row, the credit account has no segment.
      • The debit account has the segment related to the sector.
      • The amount corresponds to the portion of the stationery costs to be attributed to the specific sector.
    • Proceed with these transactions to assign the share of costs not yet attributed to each sector.

segment column

 

Opening balances of the segments

The opening balances for the segments should preferably be entered as transactions, because only in this way can they be linked to an account. If for a segment, you enter the opening balance in the Opening column (Accounts table), these are attributed to "{} unassigned segment".

To assign opening balances to individual segments and to the related account, opening transactions must be entered (Transactions table).

  • In the DocType column there must be the value 01.
  • The date must be identical start date of the accounting.

With the segment opening transaction, the amount is deleted from the "empty" segment and attributed to the specific segment.
If the balance to be distributed is negative (credit), the account without segment must appear in the Debit column and the one with the segment in the Credit column.

Segment opening transaction example:

Let's assume that the opening balance of account 1000 is 100.00 (without segment, so the amount is attributed to the empty segment) and must be attributed to two segments:

  • Segment 01 for 80.00
  • Segment 02 for 20.00
  • The opening transactions have the starting date of the accounting and in the DocType column the value 01.
  • The first opening posting of the segment has in the debit column the account 1000: EVENTS and in the Credit column have the account 1000. The amount is 80.00.
  • The second opening transaction has the account 1000:COURSES in the Debit column and the 1000 account in the CtA column. The amount is 20.00.

opening balance transaction segments


Create new year command

The Create New Year or Update Opening Balances command automatically creates the opening transactions for all segment levels.
If you do not want to report the balances of a segment level, you must delete the respective opening entries that the program has created automatically.

Use of the "-" sign as a separator

In transactions, you can use the "-" sign as a separator, instead of the ":" sign.

In the File properties (basic data) activate the option Use the minus sign (-) as segment separator.
Therefore, in transactions, use the minus sign as a separator.
If you use the "-" sign as a segment separator, you should not use accounts that contain dashes.

Reports

Reports of the segments are obtained with:

Report subdivision by level

In the Enhanced Balance Sheet with groups, in the Subdivision tab, indicate the segment level to be used.

balance sheet by segment


Summary Report

This is a report of all the segments set up in the Chart of Accounts section with a possible subdivision by period or by segment.

segments Summary Report

Unassigned segment Report

The "empty" segment gathers all the amounts that have been recorded without specifying a segment. It is possible to set up the title for this segment in the Accounts table. Please also select the option Segment header: Description in the Subdivision section.

Report segmento non assegnato

Related document: Managing sectors

 

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