Preparing for Financial Management Activities. Defining and Maintaining Currencies and Currency Rates

Transcription

1 INFO.NET V7.0 LAMAR SOFTWARE, INC. SPECIALISTS IN MANUFACTURING AND DISTRIBUTION General Ledger Module Introduction The INFO.NET General Ledger Module controls all chart of accounts Edit, budgeting, and journal processing functions. This Overview explains how the processes in this module are used to perform the following notions. Preparing for Financial Management Activities Creating the Chart of Accounts Account Allocations Entering and Maintaining Budgets Journal Processing Making Adjusting Entries Closing a Fiscal Period/Year Printing Financial Statements Defining and Maintaining Currencies and Currency Rates Defining and Maintaining Fixed Assets Defining, Transacting and Reconciling Bank Accounts Account Update Approvals 1

2 CREATING ENTITIES The INFO.NET system is designed to accommodate one or several entities. An entity is essentially an operating unit of a business. An entity may contain profit centers and/or cost centers and departments. Each entity has its own chart of accounts and financial reporting structure. Entities must share the same fiscal calendar structure, but they may operate in a different fiscal period or even a different fiscal year. Entity codes are created with Entity Master Edit-- zu010. Each code can be up to six alphanumeric characters in length. In addition to name and address information, each entity is assigned o Current fiscal year o Current period number o Retained earnings account o Year-to-date profit and loss account o Consolidation entity A null entry in this field indicates that the entity being edited is not consolidated into a higher-level entity. o Responsible general ledger entity an entry of another entity in this field indicates that the entity being defined is not responsible for handling their own general ledger. For example, if a distribution warehouse is defined as a separate entity but will be using a second entity to be responsible for their general ledger transactions, this second entity may be specified in this field. Every time an entity's fiscal period is closed with Final System Period Close gu900, the current period number and dates are rolled forward. See the concept paper Entities/Organizations for more information on the structure and defining of entities. FISCAL CALENDARS A fiscal calendar must be created before any General Ledger processes can be run. Fiscal calendars are created with Fiscal Calendar Edit zu020. The number of fiscal periods (12 or 13) and the start and end dates for each period are user-defined. Any number of fiscal calendars can be in existence at one time. One must exist for each year in which General Ledger processing will occur. It is recommended that, at a minimum, calendars for the last, current, and the next 3 fiscal years always be established. See the concept paper Calendar for a further description of calendar definitions. CREATING THE CHART OF ACCOUNTS A chart of accounts must be created for each entity. This is done with Master Chart of Accounts Edit gm100. An unlimited number of accounts can be assigned to each chart of accounts. Departments and projects can be associated with each account. 2

3 See the concept paper Account Numbers for the procedure for defining and handling account numbers. ACCOUNT ALLOCATIONS If required, an account allocation definition can be created in the program Account Allocation Edit gm200 which will permit an account value to be allocated to any number of other account / department entries on a percentage basis. The allocation will be done during the preliminary close, As the preliminary close data is rebuilt during each run, the allocations will also be redone during the preliminary close. BUDGET EDIT Budgets are created with Budget Edit gm150. Any number of budgets may be in existence at one time. Multiple budgets may be useful for planning and what-if projections. See the concept paper Budgets for the procedure for defining and handling budgets. JOURNAL PROCESSING Once the chart of accounts has been defined, journal processing can proceed. Journals may be automatically generated from the Preliminary Period Close--- gu999 routine or manually from any of the following sources o Standard Journal Entries gt100 o Recurring Journal Entries gt120 o Reversing (Accrual) Journal Entries gt130 o Prior Period Journal Entries gt190 o Prior Year Adjustments gt191 See the concept paper General Ledger Transactions for the procedure for G/L transactions CLOSING A FISCAL PERIOD The user should understand that there is no limitation in the system on performing preliminary General Ledger closes at any time. These procedures are performed in Preliminary System Period Close gu999. This program examines the data in the Inventory, Accounts Receivable, Accounts Payable, labor transactions, fixed asset depreciation, banking transactions and manual journal transactions and then rolls this period s data into the current period G/L transaction table. Each time that the preliminary close is performed, the old data found in the current period G/L transaction table is removed (except for manually entered transactions) and the data is recompiled so that any corrections made in the inventory or accounting areas will be picked up in the next preliminary close that is done. 3

4 The process of closing a fiscal period involves reviewing all posted journal transactions and running a trial balance (gr250) to determine whether all activity has been performed correctly. Once a period is closed, no further transaction activity will be permitted against it, except by special manual processes (i.e. prior period transactions or prior year adjustments) that will maintain the integrity of the accounting processes.. See the paper Period/Year End Close for instructions on closing either a period or the fiscal year. CONSOLIDATION During a preliminary close of the General Ledger, the entity structure will be searched for other entities that are consolidated into the entity being closed. If consolidation entities are found, these entities will be included in the preliminary close. An entity which has their ledger consolidated into an upper level ledger may perform preliminary closes of their own, but these closes will be discarded when the upper level entity performs their close. Entities that are consolidated must have consolidation accounts and departments specified for each postable entry in their master account table. Before preliminary closes are performed, each consolidation entity's master account structure will be examined for valid consolidation accounts. If any account is detected without a valid link into the upper level account structure, the preliminary close will be terminated until the correction is made. REVIEWING ACCOUNT HISTORY The system maintains ten years of past account balances in addition to the current year. The transaction history may be maintained as long as the user desires. The following reports can be printed for any period over the past ten years, where accounting transaction history is available. o Consolidated Budget vs. Actual Report gr160 o Formatted Reports gr220 (financial statements) o Trial Balance Report gr250 o Chart of Accounts Balance Report gr260 CURRENCY DEFINITIONS Each customer or vendor may be assigned a currency that differs from the currency being used internally in the user s account. The system will only use the entity s internal currency in its accounting procedures but will be able to present external documents using either the vendor s or customer s currency. The currency conversion rates can be modified at any time and currency gains or losses will be collected against user defined currency accounts. The currency system is described in the paper Currency Control. FIXED ASSETS Fixed assets can be defined using a variety of depreciation methods, and the fixed asset depreciation will be calculated and reported as part of the general ledger preliminary and final period close. For a description of the depreciation methods, see the paper Fixed Assets. 4

5 BANKING CONTROL Any number of banks and bank accounts can be defined, which will have both accounts payable and account receivable cash transactions automatically loaded into the banking transactions table. In addition, the banking system has a means for entering adjustment and transfer transactions and to perform a full bank account reconciliation. See the paper Banking Control. ACCOUNT UPDATE APPROVALS If required, updates to account balances can be held for approval during the update of accounts in both the final period close or during the entry of manual transactions. An approval level (stated as a value) can be set for account transactions in the final period close and for manual transaction entries. The actual implementation of account entries exceeding these limits will be held until a user with the proper security releases the transactions for update. For more detail on this procedure, see the paper General Ledger Transactions. 5