4. Parents and Subaccounts

Parent Accounts Cannot Have Values

In CFO Scoreboard, accounts can be organized in a  hierarchy consisting of "parent" and "subaccount" or "child" accounts; this is very similar to the way accounts are arranged in many common accounting systems, including QuickBooks.

One important requirement of this hierarchy is that  parent accounts cannot have numeric financial values of their own. This means that within each spreadsheet, there should not be any numbers or values in the same row as a parent account.

Demonstration

Take a look at these files below, and see if you can find the problem:

• Demo PL #4
• Demo BS #4

The error we saw is:      Invalid data in Balance Sheet -- the account Payroll Liabilities appears to be a parent account, but contains a value for October 2012

Solution

Luckily the application does most of the work for us here, by very explicitly describing the problem. If we go down to row #71 in the Balance Sheet, we can see that the account Payroll Liabilities is exactly as described -- it is a parent account, yet it has its own numeric values. These will have to go!

This is a one-step fix, followed by some explanation:

1. To resolve this, just select the entire row of numeric data (starting from cell G71 and ending with DI71), and cut paste down into cell G78. If you did this right, all the numeric values from row 71 should move down into row 78, without altering the chart of accounts on the left. That's it!

You'll notice row #78 already had a suitable recipient for these values -- an account named Payroll Liabilities - Other. It is typical in QuickBooks that if transactions are logged in the parent account, then on the P&L or BS report, these transactions will be shown under a subaccount with the suffix " - Other". We've taken this behavior and made it a general standard practice for all of our clients, even if they are using another accounting system. In other words, if your client has financial values in their parent account rows, a fine practice is to create a new subaccount row and move those values into this new subaccount.

You only want to do this, though, if those numbers represent a conceptually discrete account that really should be retained. Sometimes, these numbers are simply a subtotal. If that's the case, there is no need to create cut/paste into a subaccount; CFO Scoreboard calculates subtotals internally, which means these values can simply be deleted in these cases.