How to Set Up Departmental Accounts in MoneyWorks—A Smarter Way to Track Costs

What is departmental accounting?

Departmental accounting is a way for businesses to track the finances of each department separately. Instead of viewing the company's profitability as a single whole, it breaks things down so management can see exactly how each team, division, business unit, or branch is performing on its own. Departmental accounting helps the business identify which departments are making money or incurring high expenses, and how to make smarter decisions—what to cut and what to improve.

The Problem Alan started a chauffeured service. He has a fleet of luxury vehicles and drivers, and offers chauffeuring services to hotels and corporations. Alan knows his company’s average monthly revenue is $400,000 and that motor-related expenses are about $150,000, but he has difficulty understanding the expenses for each vehicle.

Sub-ledger method

Some may have resolved it by creating a sub-ledger. For example, the accountant may create a main revenue or expense account and add each business unit (in Alan's case, the vehicle) to that account.

40000: Sales Income

40001: Sales Income - Car 1

40002: Sales Income - Car 2

40003: Sales Income - Car 3

60000: Motor Expense

60001: Motor Expense - Car 1

60002: Motor Expense - Car 2

60003: Motor Expense - Car 3

The Sub-ledger method works, but it can become confusing with many business units, and you may need to export the report to a spreadsheet and use formulas to separate the data. Besides, the account list grows as the business unit grows. Imagine you have 15 related accounts and 10 cars; you need to create 150 accounts, and 450 if you have 30 cars.

Departmental Account

Let's say Alan is using MoneyWorks accounting software. He can use the built-in departmental account feature to track the income and expenses, as well as the assets and liabilities, of his vehicles.

Instead of creating a lengthy list of accounts, he can maintain only the main account.

40000: Sales Income

60501: Petrol

60502: Salary

60503: Parking fee

60504: Repair and Maintenance

60505: Loan Interest

60506: Car Insurance

60507: Road Tax

60508: Depreciation

And create the business unit (or cost centre) as departments.

How to set up departments in MoneyWorks

There are three components in departmental account setup:

• Departments

• Department Group

• Link the Department Group to the account

Departments

The department is the business unit. In Alan's case, his business unit is his vehicles.

Go to the Show menu and select Departments; then click the New button in the Departments list to add the vehicle. Alan can use the car plate number (e.g., 1234, 2345, 3456, etc.) as a department code instead of Car1, Car2, and Car3 to simplify reporting. Then enter the car description in the department description.

A sample department:

Code: 1234

Description: Toyota Alphard SXX1234A

Department Group

Next, Alan needs a Department Group. A Department Group is a container that groups all related departments. 

Go to the Show menu again, then select Department Groups. Create a Department Group (such as CARS), then click the Add button to add the departments (vehicles) to it. For example:

Code: CARS

Description: Cars (or Vehicles or something you prefer)

Departments that belong to this group:

1234

2345

3456

Note: the maximum number of characters for the Department and Department Group codes is five.

Link Department Group to the Account

After you have created the Departments and Department Group, you need to instruct the system which account you want to track by department.

Select the Account list from the Show menu, then modify the account you wish to edit and tag it to the appropriate Department Group. For example:

Code: 40000

Description: Sales

Dept Group (Department Group): CARS

Code: 60505

Description: Loan Interest

Dept Group: CARS

Record a transaction

Here's how it works when entering a transaction:

Let's say Alan needs to record a $550 payment for the car loan interest on car number 1234.

He initiates a new payment transaction, enters the payee, date, and voucher number, then selects the loan interest expense account 60505. Because Alan has already tagged the CARS Department Group to the loan interest expense account, MoneyWorks will prompt Alan to select a Department from the Department list next to the account.

Click Department 1234 from the list, enter $550 in the Net amount field, and select the appropriate GST code in the TX column.

The detail line shows the account as 60505-1234 and the account name “Loan Interest (Toyota Alphard SXX1234A)”. A hyphen joins the department to the account code.

Department vs Sub-ledger method

Although the department is similar to a sub-ledger, it maintains a cleaner, shorter account list, and Alan adds a department to the department list rather than adding multiple accounts whenever he creates a new department (Vehicle).

Chart of Accounts comparison:

Sub-ledger Method	Department Method
Petrol-1234 Petrol-2345 Petrol-3455	Petrol
Salary-1234 Salary-2345 Salary-3456	Salary
Parking-1234 Parking-2345 Parking-3456	Parking
Depreciation-1234 Depreciation-2345 Depreciation-3456	Depreciation
Repair and Maintenance-1234 Repair and Maintenance-2345 Repair and Maintenance-3456	Repair and Maintenance
Loan interest-1234 Loan interest-2345 Loan interest-3456	Loan interest
Insurance-1234 Insurance-2345 Insurance-3456	Insurance
Road Tax-1234 Road Tax-2345 Road Tax-3456	Road Tax

Reporting

Instead of exporting the lengthy reports to a spreadsheet for sorting, you can print the Profit and Loss statement for each department directly from the MoneyWorks software, which shows you the revenue, expenses, and the bottom line for each department.

Alternatively, you can create a department-by-department analysis report to compare each department's revenue or analyse each department's monthly expenses.

Summary

Departmental accounting gives businesses a cleaner, more scalable way to track performance across teams, vehicles, branches, or any business unit—without bloating your chart of accounts. Unlike the sub-ledger method, which multiplies accounts as your business grows, MoneyWorks’ department feature lets you add a single department code and instantly track income and expenses across all tagged accounts. For Alan's chauffeur business, this means knowing exactly how each vehicle performs—without manual workarounds.