Adding details to accounting systems is generally easy; all that is required is the creation of additional categories. By contrast, adding details to a dynamic model requires more than just another stock or two and the corresponding rates of flow. For every flow in a simulation model it is necessary to formulate a policy that determines that flow. Adding one stock and flow may create many new feedback loops. Therefore, in developing dynamic financial models we do not want to delve into the detail required for a fully functional accounting system. The choice of how much detail to include must depend on model purpose.
An important factor in determining the level of detail to include is the dynamic implications of introducing a finer structure. For example, suppose that when you sell a product you charge both for it and shipping. If you are setting up an accounting system you will want to set up two different accounts for these two revenue sources. For doing financial modeling, however, making the distinction would not be worthwhile. Every time a product is sold it is shipped, every time money is received for a product that has been sold the shipping charges are also received. Unless there are dramatic changes in the shipping mix, shipping charges can netted out or lumped into product sales without changing dynamics.
