GENERAL LEDGER
GENERAL LEDGER
The General Ledger is based around a tree structure. The structure normally has two
roots; Balance Sheet and P & L. It is flexible and accounts may be moved around the
tree, and renumbered.
The tree structure is established by setting the Add To account on a ledger code. This
sets its parent in the tree. The root codes do not have an Add To account.
Normally the two branches are made up as follows:-
a. Total Balance Sheet
a. Equity
- Authorised Capital
- Retained Profits
- Shareholders Funds
b. Assets
- Customers
- Stock
- Bank
- Asset ledger
c. Liabilities
- Suppliers
- Loans
- Accrued Payments eg GST, Paye
b. Nett Profit
a. Gross Profit
- Sales
- Cost Of Sales
b. Expenses
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GENERAL LEDGER
CONTROL FILE
The control file establishes where the total of all the P & L roots gets added to in the
balance sheet (usually a code in the equity section). A balance sheet report will take
any figure from the P & L branches and place it in the report automatically. At year-end
the profit should be journalled appropriately to the balance sheet as the P & L rolls
back to zero
The control file establishes the GL accounts for GST in and out, PAYE, student loan and
settlement discount. In bakery there are also the rebate expenses and accrual codes
and commission expenses and accrual codes. It also sets defaults for customers,
suppliers, product group and payroll.
TRANSACTIONS
Every transaction updates the G/L. There are five Transaction types
Cashbook
Creditors (Vendors)
Debtors (Customers)
Inventory
Payroll
Where possible the GL codes are provided transparently for this update. The only
transactions requiring codes are journals (GL, Debtors (Customers), Creditors (Vendors),
Cashbook, and Inventory), and purchases of non stock items (Power, Insurance).
To this end every customer has a GL code. This sets where in the balance sheet the
outstanding figure is accrued.
Every creditor (vendor) has a GL code that sets where in the balance sheet the
outstanding figure is accrued
Every product group has three codes (each product belongs to a group). One for sales
(P&L), one for cost of sales (P&L) and one for stock (Balance sheet).
Every employee has 3 codes one for expenses (Net Wages and PAYE) and Balance Sheet
(accrued unpaid wages).
Every bank account has a GL code to accrue the bank balance.
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GENERAL LEDGER
The transactions have sub types as follows
1. Cashbook (Each cashbook transaction has a bank account establishing one side of
each GL transaction.)
a. Customers – every line is a receipt – may be one or a batch
b. Creditors (Vendors) – every line is a payment – may be one or a batch
c. Payroll – batch of payroll payments
d. Journal - batch of misc transactions with GL code
2. Customers (Each customer transaction has a debtor establishing one side of each
GL transaction.)
a. Invoice – every line has a product
b. Receipt – linked to cashbook
c. Journal – requires GL code
d. Order – no direct GL allocation until sale confirmed and
invoiced off order
3. Creditors (Vendors) (Each creditor (vendor) transaction has a creditor (vendor)
establishing one side of each GL transaction.)
a. Invoice – every line stock or GL code
b. Payment – link to cash book
c. Journal – requires GL code
d. Order - no direct GL allocation until receipt of goods and
invoiced off order
4. Inventory (Each Inventory transaction has a product which has a product group
establishing one side of each GL transaction.)
a. Adjustment/Journal – requires GL code
b. Sales Order line – goes on debtor (customer) order
c. Sales Line – goes on debtor (customer) invoice
d. Purchase Order Line – goes on creditor (vendor) order
e. Purchase Line – goes on creditor (vendor) invoice
5. Payroll (Each payroll transaction has an Employee establishing one side of each
GL transaction.)
a. Payslip
Budgets are set by month and the P&L: Report may have budgets printed. The account
may be tagged as Expense in which case it will report a negative number positive and
show positive numbers in brackets). A revenue account shows negative numbers in
brackets
The P&L report may be printed by month, quarter, or year.
As for all files the data may be extracted selectively to a csv file for use by Excel etc.
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GENERAL LEDGER
ANALYSIS
This is a list of the different analysis you can get out of the system:-
Debtor (Customer) has weekly and monthly totals for sales $, cost $, rebate
Debtor (Customer) type has weekly and monthly totals for sales $ and cost $
Debtor (Customer) department has weekly and monthly sales $ and cost $
Debtor (Customer) by Product has weekly and monthly quantity sales $, cost $ and daily
order lines
Product weekly and monthly quantity sales $ and cost $
Product group weekly and monthly quantity sales $, cost $
Supplier monthly purchases
Employee monthly analysis by transaction type
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