Important Things to Consider when Changing your COA Structure
Important Things to Consider when Changing your COA Structure

Over the years, we have had many clients who have taken on the project of changing their chart of account (COA) structures. These projects can be resource and time consuming and they affect many business areas and processes beyond accounting and finance. We have found that when clients consider the downstream reporting systems (like IBM Cognos TM1) early in the chart of account change project, they avoid some critical pitfalls that can affect the success of these projects.

Why change your chart of account structure?

There can be several reasons for a business to change its chart of accounts. Businesses are constantly changing. As the business acquires other entities, launches new products or starts operations in new locations, the chart of accounts needs to be able to incorporate these changes flexibly and efficiently to support the reporting needs of their organization.

You may consider restructuring your chart of accounts if:

  • You can no longer generate financial and management reports directly from the COA efficiently.
  • You can no longer easily integrate organizational changes or natural accounts groupings into the COA to support external and internal reporting and compliance requirements.
  • You are moving to a new ERP/GL system and a new chart of account structure is needed to take advantage of full functionality of the new environment.

Beyond the GL

Many of our clients get so involved in the actual changing of the COA codes and mapping them in the GL system, they forget to consider other key areas impacted by this change.

If you have a reporting and budgeting/planning system like IBM Cognos TM1, you should consider the impact of a COA change on this system as early as possible. You will need to determine the impact of the COA change to the data load processes—dimension/hierarchy definitions, embedded logic (TM1 rules) etc. Depending on the extent of the changes to the COA structure, you may need to create new TM1 dimensions and cube models to support the new structure.

Re-mapping of historical data

Most clients consider the need to re-map historical data within the GL. You also need to determine what other reporting system data needs to be re-mapped to support all of your reporting needs on the new COA structure.

Many of our clients also use their TM1 systems to report and model data at a much more granular level than the GL balance level (employee/staff, revenue, vendor, etc.) If you do not map this data to the new COA structure, it will impede your ability to have historical trending reports of this data once you convert to the new COA structure.

To support this, we typically re-create the mapping tables used in the ERP system within TM1 and create processes that allow our clients to map all the historical data they need to support their reporting requirements.

Use your reporting system during the COA project

We also often use TM1 as early as possible in the COA project to download the data from the GL as soon as it is available mapped to the new COA. TM1 users can then see their data in the new COA structure in the reporting tool they are accustomed.

The benefits of this approach are:

  • Users can start reviewing the new COA early to familiarize themselves with the changes to the COA. This gives these users much more time to plan how to incorporate the new COA into the reporting that is required of them.
  • TM1 users can more easily participate in the reconciliation process to ensure the data moved from the old COA to the new COA is correct.

Use the new COA as an opportunity to review your reports

A key task to the COA project is the re-creation of many reports that are impacted by the COA change. This gives you the opportunity to review all the reports you currently produce and determine the reports that are truly required.

We have found the best approach is to organize your reports into:

  • Must have reports that need to be converted as part of the COA conversion. These are reports that are required to be available as soon as the new COA is active.
  • Nice to have reports that can be re-created over time but are not required for go live.
  • Reports that can be eliminated. Many clients find by reviewing all of the reports they have many reports that are produced that are redundant to other reports or have no significant reporting or analytical value.


By considering the impact of your COA structure changes on your FP&A system, you will have a much more successful project. If you are considering a change to your chart of account structure, let us know. We can share our best practices and client stories to make your transition as easy as possible.