It will be difficult to perform the following accounting functions without accounts classification:
i) Harmonization of Accounts;
ii) Uniform classification of Accounts;
iii) Financial and budgetary control;
iv) Financial Reporting;
v) Computerization of large amounts of financial information;
vi) Resource Allocation;
vii) Expenditure / Revenue Tracking;
viii) Development of Audit Trail

i) It reflects financial responsibility and accountability;
ii) It enables analysis of the budget by sector, geography and activity;
iii) If follows a logical pattern and so after some initial training and experience is relatively simple to understand and operate;
iv) It allows scope for future refinement and development and the introduction of more sophisticated forms of accounting elements of accrual accounting are already provided for;
v) It facilitates the integration of recurrent and development activities and provides for the separation of recurrent and development expenditure;
vi) It enables direct comparison of budget, commitment and actual transactions on modified accrual accounting and also facilitates measurement of resources;
vii) It introduces cost centre budgeting and accounting, which provides management of a budget at a decentralized level. These centres are equivalent to Head and Sub-Head Controllers as well as projects.
viii) It facilitates the production of consistent financial information at different levels of aggregation, resulting in a consolidated level of accountability to all interested parties.

Definition of CoA:
CoA is a structured set of codes that provides a framework for Recording, Classifying, and Organising Budget Data and Accounting Transactions into Reports and Statements. It provides various perspectives of financial transactions and facilitates budgetary controls.
Segments of the harmonised CoA:
1. Institution Segment- This segment is used for coding an Institutional Unit which stands as an economic entity. An institutional unit as defined in the GFS 2001 Manual “is an economic entity that is capable, in its own right, of owning assets, incurring liabilities, and engaging in economic activities and in transactions with other entities. These entities should be treated as separate government units if they maintain full sets of accounts, own goods or assets in their own right, engage in non-market activities for which they are held accountable at law, and are able to incur liabilities and enter into contracts.”

2. Funding Segment – The Funding segment provides a means to track the source of funding for expenditures within a consolidated reporting scheme. Expenditures are assigned against the appropriate funding code, independent from the organizational or program structure.

3. Functional of Government (COFOG) Segment – This segment provide coding for functional classification of expense to provide a strategic view of the allocation of budget resources between different sectors of the economy. This is based on the United Nations Classification of Functions of Government (COFOG). It is a detailed classification of the functions, or socioeconomic objectives (eg, health, education, defense, etc), that Government units aim to achieve through various programmes.

4. Organisational Segment – The Organizational segment provides the basis for establishing the responsibilities for the day-to-day administration of government business. The structure of the organizational hierarchy is reflected in the series of codes for ministries, departments and agencies (Cost Centres/ Spending Units) reporting under the Sector Ministries.

5. Program and Sub-programme Segments – These segments provide the basis for recording transactions associated with a specific program or sub-program that is operating under an organizational unit

6. Activity Segment – This segment provides classification of various activities related to specific programmes, sub-programmes or outputs.

7. Location Segment – Provides geographical location of an institution, organisation, programme, etc based on established political and administrative districts of Ghana.

8. The Natural Accounts segment – This is an Economic Classification which provides the basis for recording specific activity by the kind of transactions by which the Government performs its functions. This segment provides classification and coding for revenue, expenditure, liabilities, etc.

Uses of harmonized chart of accounts may also be explained as follows:
i. Harmonization of accounts of MDAs and MMDAs;
ii. Uniform classification of accounts in public financial management;
iii. Control of accounts in public financial management;
iv. Tracking of revenue and expenditure in public financial management;
v. Efficiency and effectiveness in budgetary resource allocation; and
vi. Design of audit trail