G/L Re-Indexing. Preliminary Considerations. Summary Re-Index Process

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1 This feature works by retroactively applying system settings to posted transactions. Some account numbers and account balances may change as a result of performing a re-index. Preliminary Considerations Obtain professional guidance. Before performing a re-index, please discuss the changes with DDI Support. There could be changes to financial information and some will be irreversible. Document the system setting changes prior to the re-index. If the system has to be restored to its previous settings for any reason, this information will be required. Know the current General Ledger Fiscal Year. Go to Accounting > General Ledger > G/L Inquiry to view the current fiscal year on the top right side of the screen. Performing a re-index will affect transactions from the beginning of the current fiscal year. Clear the system of active users. To prevent internal errors, re-indexing should only be done when there are no active users on the system. An active user is someone performing a process that impacts a G/L account balance or product value. Go to Utilities > System Users & Locks to view all active users. Capture financial data snapshots before and after the re-index. DDI strongly recommends producing monthly G/L balance information immediately before and after a re-index. This data is necessary to determine any account balance changes and whether the expected changes happened. Use Advanced Report Writer to capture monthly G/L account balances for all periods in the year being re-indexed. For more information please refer to Using ARW with Re-Indexing. Allow sufficient time to complete the process. Depending on the volume and scope of information currently stored in your system, this process will take between 1 and 15 minutes. High-volume, multibranch systems will require 60 minutes or more and are best initiated at the end of the day. Summary Re-Index Process Check the current fiscal year at Accounting > General Ledger > G/L Inquiry. Avoid reindexing closed years because there could be permanent balance changes. Users of Inform Version 17 and higher must avoid re-indexing a closed year due to G/L Control Table additions. Ensure that there are no active users for optimal performance and to avoid record locks. Capture a current accounting period Trial Balance in Excel format as the baseline data. Page 1

2 Run the process at Accounting > General Ledger > Re-Index General Ledger. This may take several minutes. Do not interrupt while running. Take another current period Trial Balance in Excel when the process is complete. Allow users to resume normal activity. Compare the balance changes. It is usually obvious when the balance in one account increases and another decreases by the same amount. Comparing Balance Changes This example shows the results of a re-index that caused an equal exchange between Inventory and Non-inventory. Please note that this data must be captured immediately before and after the reindex to provide an accurate assessment of any changes. System Changes Requiring a Re-Index: Following are some common examples of financial structure changes that necessitate a re-index. Scenario 1: G/L Control Table Change A new Freight-Out G/L account is created to separate revenue from cost. Previously, all freight was being recorded in the same Freight-In account. Create a new G/L Account (Accounting > General Ledger > G/L Account > New). Place the account in the G/L Groups REV and IS to include it on financial statements. Edit the G/L Control Table Freight-Out field (Accounting > General Ledger > G/L Control Table > Edit > Freight Out). Re-Index the General Ledger (Accounting > General Ledger > Re-Index General Ledger) after all active users are logged out. Page 2

3 Results: There will be no effect on the bottom line because this is a reallocation of existing account balances. The Freight-In account will contain only Purchase Journal Items and carry a debit balance. The Freight-Out account will contain only Sales Journal items and carry a credit balance. Scenario 2: Product Line G/L Change Separation of revenue and costs by Product Line is implemented. Formerly all sales were mapped to a General Sales account. Management wants to separate both Sales and Cost of Sales by individual Product Line to more effectively gauge performance without having to create a separate report. Create the necessary G/L accounts for Revenue and Cost of Sales. Best practice is to align the account numbers so they show up in consistent order on the financial statements, for example Sales is #4000, Cost of Sales is #5000; Sales Paper is #4100, Cost of Sales Paper is #5100, and so on. Group the accounts in REV and IS, or COS and IS for appearance on financial reports. Edit each Product Line s G/L destination accounts (File > Product > Product Line > General Ledger Tab). Results: There will be no effect on the bottom line. The old default Revenue account credit balance will be exchanged for credit balances in the new Revenue accounts. The old default Cost of Sales account debit balance will be exchanged for debit balances in the new COS accounts. Scenario 3: Branch G/L Change A second branch is added. The Chart of Accounts will be expanded for Income Statement accounts only. Go to File > Company > Branch to set up the new G/L suffix. If the branch separation will only apply to certain accounts (for example, cash, inventory, sales and cost of sales), set the accounts individually on the G/L tab. If the separation will apply to all Income Statement accounts, set the G/L suffix instead. Results: There will be no effect on the overall bottom line. Branch-specific G/L accounts will be created if there has been any activity entered from the new location. Page 3

4 Scenario 4: Inventory Costing Change Management has determined that Inventory should be valued at Average Cost (C2) instead of Manual Cost (C1). Based on a comparison of Inventory Value Reports, it s estimated that the overall value will decrease slightly when valued at C2. Go to File > Company > Master > Pricing and Costing Tab to view current cost settings. Before making any inventory costing changes, consult with DDI Support to review the ramifications. Capture a current Inventory Value Report at the old cost and again at the new cost. Perform the cost changes in Company Master. Capture preliminary financial data from all periods in the current fiscal year. Results: The bottom line will be affected, but it will be difficult to predict until the process is completed because of the individual behavior of each item. For instance, a decrease to overall stock value after changing to C2 does not necessarily mean that Cost of Goods will decrease. Accounts affected: Inventory, Drop Ship Inventory, Non-Inventory, Cost of Goods and Inventory Change. Scenario 5: Miscellaneous Charge Code Change A code used on sales orders to give customer refunds is incorrectly linked to a bank account. This is causing the Sales Journal to record erroneous postings to the bank account. If the organization handles point of sale, the bank general ledger accounts will be adversely affected. Go to File > Company > Bank > Ledger to check the current balance. Compare it to the current G/L balance for the same bank. If a discrepancy exists, it is likely that a correction to the Charge Code and re-index will correct the current year posting. Go to File > Company > Miscellaneous Charge Code and make the corrections to the G/L account by using a Balance Sheet Liability called POS Returns & Refunds. Results: The balance in the bank account will be reduced and transferred to the newly created account. Overall there will not be a change to the bottom line. Accounts affected: Balance sheet asset (bank) and liability (refund suspense). Page 4

5 What s affected by Re-indexing Types of G/L accounts affected by re-indexing Any G/L account appearing on the G/L Control Table Any G/L account associated with a Customer Sales Tax Code Any G/L account associated with a Miscellaneous Charge Code Any G/L account appearing on the Company Branch G/L Tab Any G/L account appearing in a Product Line specification Any G/L account appearing on the Company Warehouse Master (Inventory and COS Suffixes) Transactions affected by re-indexing Current Fiscal Year transactions G/L Control Table mappings retroactively from the beginning of current fiscal year Product Line G/L mappings retroactively from the beginning of current fiscal year Miscellaneous Charge Code mappings retroactively from the beginning of current fiscal year Customer Tax Code mappings from date of re-index forward Company Master Costing specifications retroactively from the beginning of current fiscal year Inventory Adjustment Cost Column retroactively from the beginning of current fiscal year Sales Invoice G/L Cost Column retroactively from the beginning of current fiscal year Source Codes affected by re-indexing Sales Journal Inventory Control Journal Finance Charge Journal Warranty Control Journal Transactions not affected by re-indexing Converted transactions from previous system Sales Tax amounts and percentages prior to the date of re-index Prior fiscal year transactions Prior bank account transactions Accounts Payable transactions prior to date of re-index Cash Receipts transactions prior to date of re-index Cash Disbursements transactions prior to date of re-index Journal Entries Vendor Master Expense and Liability G/L changes Source Codes not affected by re-indexing Purchase Journal: expense accounts remain as originally specified Cash Receipts Journal: bank accounts cannot be retroactively re-indexed Cash Disbursements Journal: bank accounts cannot be retroactively re-indexed General Journal: journal entries cannot be edited by a re-index Page 5