General Ledger Overview

The General Ledger tracks financial expenditures within the company and generates financial statements and reports for management, auditors, and investors. The General Ledger is tied to other parts of the system through the Chart of Accounts and the distribution journals.

Some European countries add a separate Analytical Accounting system to track revenue and expense accounts.

The Chart of Accounts defines account numbers used throughout the system to record, track, and report costs. An account in the General Ledger tracks domestic currency spent or earned by business activities, such as paying bills, receiving payments, cutting payroll checks, purchasing and receiving supplies from vendors, paying rent, and material and job transactions.

Financial information collected during day-to-day operations is posted frequently to distribution journals. Once their accuracy can be verified, the transactions are posted to the General Ledger at regular intervals. These are the distribution journals:

Accounts Receivable
Accounts Payable
Fixed Assets
Inventory
Multi-Site
Payroll
Purchasing
Order Entry
Shop Floor Control
Work Center
Currency Banking Journal
Project Control.

In addition to the distribution journals, there is a General journal that you can use to hold closeout and summary entries for year-end procedures.

You can also create user-defined journals - custom journals to store, retrieve, and track entries specific to your business. Examples include Accruals, Reversing Entries, Adjusting Entries, Intercompany Eliminations, Banking Transfers, Charges, and Credit.

Four unit codes can be activated for each account in the Chart of Accounts, to collect key management data. You can define unit codes to track those costs important to your business, such as sales territory, individual sales representative, product or product family, location of manufacture, work center, cost center, and department.

Benefits of the General Ledger include:

Provides detailed financial statements/reports.
Maintains complete journal and ledger transaction details.
Allows detailed or summarized account information.
Provides a bank reconciliation feature.
Maintains all journal transactions in edit list form prior to posting to General Ledger.
Provides the ability to report prior or future years with budgeting and planning comparisons for current year.
Provides complete support for multi-site financial reporting, including financial consolidations.
Distributes an expense among more than one account according to percentages you define in Account Allocations. For example, you may want to divide a monthly office lease payment among the departments sharing the building quarters.
Automates the process of storing and posting recurring entries by using recurring journals. Simply create an entry once for each recurring expense, and the system automatically enters the transaction into the general ledger each period.
Provides flexibility so you can decide when and how to handle month-end closes. And you can begin entering next month's business transactions even before the current month has completely closed.
Calculates retained earnings for the fiscal year at year-end closing.
Provides statistical accounts in financial statements to compare important non-financial data to related financial data for measuring such things as productivity and controlling costs.
Offers a financial statement capability, which presents financial information from the General Ledger in a variety of formats to meet requirements of auditors, investors, and managers.

General Ledger Overview

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