Leverage Core Accounting Principles when Modeling Financial Data

[fivetran-joemarkiewicz]

Overview

Posting here to continue the thread from the dbt-technical-blog-writing discussion on In Depth Accounting Modeling. I was presented with the opportunity to start a discussion in this repo to propose a possible blog post on the topic. As I have had the joy of working with a lot of dbt packages modeling accounting data in a standardized format, I thought it would be great to take a "retro" and informative approach to this blog.

I wanted to share my thoughts on an outline for this possible blog here and to get your initial thoughts before writing anything more. I have included the outline below, but also will share my Google Doc with the outline included so you may add more detailed comments if you would like. Let me know what think, and what next steps for writing a first draft of the blog post would be!

• If you don't have access to the Google Doc, feel free to request access and I will approve as soon as possible.
• The name is super lengthy and very much open for that to change to something better!

Outline

Intro:

• Accounting and data modeling are not so different
  • Highlight Joel’s tweet on this subject!
  • Highlight the core accounting principles and how they are consistently applied for effective financial analysis
  • Regardless of what accounting software you are using, these standards will be consistently applied to how you report on your financial data
• Highlight why it is beneficial for analysts to leverage these standardized models when doing their financial analysis
  • Core principle of packages, “why rebuild the wheel when someone else has done the work for you already”
  • You can leverage these principles regardless of what data loader you are using and what accounting software you are leveraging
• Touch on the past dbt packages developed (Netsuite, QuickBooks, Xero, Sage Intacct) that apply these accounting principles and the three types of output models they provide:
  • General Ledger / Transaction Detail
  • Balance Sheet
  • Profit & Loss Statement

Body:

• Transaction focused general ledger as the base of all reporting
  • How to build the general ledger or transaction detail equivalent
  • Share what are some common key learnings and mistakes when building the GL
• General Ledger provided by period for better monthly breakdowns and rolling sums for balance sheet accounts
  • Go over the SQL that has been used in Sage, QuickBooks, and Xero to explode the GL for monthly reporting
• Easy filtering from the period GL for financial statements
  • Profit and Loss
  • Balance Sheet
• How to effectively leverage these end models in the wild
  • What more can you analyze with these output models

Conclusion:

• Quick recap on what was learned when building out the accounting packages and how the standardization was successful
• Conclude on how you can leverage the pre-built models from the packages or apply the same principles to your own modeling
• Ponder thoughts for the future on what other sources can leverage standardized modeling principles and why this is exciting
  • Customer Support (Zendesk, Intercom, Jira)
  • Billing and Subscriptions (Stripe, ReCharge, Recurly)
  • Marketing (Marketo, Mailchimp, Iterable, Kalviyo)