General Ledger

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General Ledger System

When used in conjunction with other modules, there is very little work involved in maintaining the general ledger. Yet, the General Ledger System (G/L) can also be used as a stand alone system to enter all of the cash receipts, cash disbursements, recurring entries, and adjusting entries for the company. It is comprised of three areas that include transaction entry and posting, financial reporting, and utilities. Within a company, the user can define multiple profit centers. A profit center is a division, department, branch location, inventory warehouse, etc. Primarily, a profit center is something that typically has revenue and expenses that can be paired to provide a net profit or loss unit, sometimes referred to as a financial unit. Each profit center is identified by a two character, alphanumeric field which accommodates over 800 profit centers.

Transaction entries come from three places: direct entry for adjustments and other miscellaneous entries, recurring entries, or other modules that maintain subsidiary ledgers. Examples of subsidiary ledgers include the A/R Ledger Card File, A/P Ledger Card File, and the Inventory System. Each subsidiary would have one or more G/L control accounts. A control account is one to which no direct entries can be made. Its balance is changed solely from entries sent from the subsystems. These entries made to the G/L Transaction File are combined with direct entries for other G/L accounts and subsequently posted, usually once per day, into the actual G/L files. The program that posts the transactions makes many checks on the integrity of the data, including account code verification, date verification, and verification that all entries are balanced. Checks are made when entries are added to the G/L Transaction File as well as when the G/L Transaction File is posted. This feature makes it virtually impossible for the G/L to receive invalid data that would cause it to become out of balance.

Standard accounting reports from the G/L System include a trial balance, trial balance work sheet, balance sheet, and income statement. A formatted balance sheet and income statement are also present for grouping accounts into lines on a more formal report for management, bankers, board members, etc. All reports have an extremely flexible set of parameters for obtaining the necessary information. Since the system revolves around a file designed like that of a data base management system, where records are posted with dates, you can print reports for virtually any period (date range) desired. This means an income statement can show profit or loss for a day, week, month, quarter, year, decade, etc. There are no restrictions on the number of accounting periods in a year and no problems distinguishing calendar years from fiscal years. None of the reports modify any files and can be run as many times as needed for any period required.

The utility programs supplied with the G/L System gives you flexibility in maintaining your system. The programs provide the ability to easily add profit centers, change account numbers, display records as journal entry sets, and verify formal financial format files (listing control files). One special utility is used for closing the revenue and expense accounts for a given accounting year. You should note that there are no mandatory closing procedures for the accounting periods within an accounting year. In fact, none of the modules of the FAS require closing procedures. The system imposes no deadlines that may delay the processing of subsequent accounting periods. The user has complete control over the acceptable date range for the current period. This date range is enforced for all posting dates, giving you control over posting dates and the flexibility of opening the range to introduce adjustments to other periods as necessary.