If your accounts package makes use of multi-segment nominal codes, you can find your nominal codes breeding like rabbits. A reader asks David Carter for help.
Anyone who reads the AccountingWEB software Lab Tests will know that I don't like accounts packages that use multi-segment nominal codes.
The problem with multi-segment codes
At its simplest a nominal code is one of the accounts that appears in the P&L or Balance sheet - Rent, Marketing etc. But supposing you need to analyse to cost centres and departments for your management accounts?
One solution favoured by package designers is to add these cost centres and departments to the nominal code and combine them into one 'multi-segment' account code. Segment 1 (digits 1 to 10) might contain the nominal code proper, segment 2...