Tagging the Ledger by Department, Branch and Project

Every journal line in AWRA can carry three optional tags: a department, a branch and a project. A branch is one of your warehouses — AWRA has no separate branch record, and the warehouse list is already what a multi-site organization calls its branches. You tag by hand on manual journal lines, where each line has its own three selects, and on expenses and supplier bills, where the tags on the form go onto the journal lines the record posts. On a new bill or expense the branch starts as your own branch if you have one and the department starts empty on purpose: tag the department the cost is for, not the department of whoever typed it.

Many postings tag themselves. A sales invoice’s revenue carries the invoice’s project and branch. A payroll run splits the salary expense by each employee’s department. An expense claim line carries its project, or the employee’s department when it has none. Depreciation carries the asset’s current branch. Stock movements carry the warehouse and project of the adjustment behind them. Petty cash vouchers carry the float’s branch plus the department and project chosen on the voucher, and staff advances carry their department and project onto every later entry. One rule fills a gap: a posting with a project and no department takes the project’s department.

In practice: a construction firm with yards in Nairobi and Nakuru sets its departments as Operations, Workshop and Administration and opens a project per contract. A diesel bill for the Nakuru yard is tagged Nakuru and Operations and the road contract; the invoice to the client for that contract carries the project and Nakuru on its own; the monthly payroll lands under each person’s department. Nobody keys a tag on the invoice or the payroll, yet the project shows both its revenue and its costs. Tags must belong to your organization, and deleting a department, warehouse or project never deletes ledger lines.

Open the Income Statement. Beside From and To there are three filters, Department, Branch and Project, each starting at All, and a Break down by select. Choosing a value in a filter limits the statement to lines carrying that tag; the filters combine, so Branch Kisumu with Project Borehole Phase 2 shows only what is tagged with both. Click Apply Filters to run it and Reset to clear everything. The figures come from the same single statement engine as the rest of accounting, so a filtered statement is the same calculation over fewer lines, not a separate report that can disagree.

Break down by adds a second table with one column per value of the chosen tag — one per department, branch or project that has postings — plus a column called Unassigned for lines with no such tag. Unassigned is not an error: it is postings made before the tags existed and postings nobody tagged. It is the measure of how far you can trust the breakdown. If Unassigned holds a third of your expenses, a department’s column understates what it costs, and the fix is to tag at the source, not to adjust the statement.

In practice: a school with three campuses, set up as three warehouses, runs the income statement for the first term with Break down by Branch. Two campuses show a surplus and the third a small deficit, and Unassigned holds KES 1.2 million of expenses. Drilling in, the bursar finds the term’s electricity bills were entered without a branch. She tags the next bills properly and posts a manual journal moving the term’s electricity from untagged lines to each campus, after which the deficit campus turns out to be the most efficient of the three.

The balance sheet takes only an as-of date. A balance sheet filtered to one department would not balance unless every line of every entry carried the same tag, and a manual journal is free to tag its two sides differently — moving a cost from one department to another does exactly that. Filtering it would produce a statement that looks authoritative and does not add up, so AWRA does not offer it. The cash flow statement takes dates only too: the cash side of a payment is rarely tagged, so a cash flow for one department would show almost nothing.

Budgets are where tags pay off a second time. A GL budget can be set for the whole organization or limited to one department, one branch or one project, and its actuals then count only entries carrying that tag. A project budget compares what was planned against what the project’s tagged lines actually show, and the same Unassigned discipline applies: an untagged cost never reaches the project’s actuals, so a project can look under budget simply because its costs were not tagged.

In practice: a health NGO runs each donor grant as a project. The finance team sets a GL budget per grant, tags every bill, expense claim and advance with the grant’s project, and checks the income statement broken down by project each month before the donor report. They reconcile the grant’s bank account separately, because the cash flow statement is not split by project. Their monthly habit is one number: Unassigned expenses on the project breakdown, which they work to keep near zero.