Your organisation has its own way of classifying, or describing, expenditure account items; the software has its way of classifying items, which is taken from the National Accounts. A conversion table, known in ABS (Australian Bureau of Statistics) publications as a Concordance Table, translates between these two classification systems.
The conversion table can be used to map your organisation’s classification system into that of the National Accounts so that each one of your expenditure items is re-classified into one or more industry sectors from the National Accounts.
The classifications used are the industry sectors from the National Accounts published regularly by the Australian Bureau of Statistics (ABS). The conversion table will allow you to translate for example, packaging into paper containers and plastic products, or consulting services into technology, legal, and typing services. This way the expenditure item in your accounts will get allocated to the correct industry sector/s. This is important because all of the calculations performed by the software are based on data from the industry sectors in the ABS National Accounts.
Note: you only need allocate an item to more than one category if your accounting system has lumped together items from different National Accounts classifications. For example if your system has grouped paper and plastics in the one category of packaging. You do not need to allocate an item to more than one category just because you know that it has passed through several processes before it gets to your organisation. For example you do not need to allocate office stationery to softwood woodchips and paper products just because you know that paper is made from woodchips that are eventually manufactured into stationery.
Examples for ABS product groups are
Looking at this lists you can tell there is an order in them. They start at the raw or primary materials (rice, oats, iron ore), followed by the processed or secondary goods (cereals, spirits, basic steel, steel sheets, vehicles), and finish with the tertiary services that make use of goods and people’s labour (restaurant meals and transport). Understanding this distinction will help you in interpreting the National Accounts.
Once your account descriptors have been entered and re-classified in accordance with the ABS national classifications you can choose to use either your own descriptors if they make more sense to you, or the ABS descriptors.
The examples will assist you in further understanding this concept.
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