General Ledger - Setup and Maintenance Overview

A GL account number can consist of 24 alphanumeric characters, and all account numbers must be the same length. You can group the characters into seven segments, which you can separate with one of several fill characters.

Use the following items to set up your account numbers:

• account masks and fill characters
• account segments
• account classes
• account types

Account mask

The format of an account number is defined by an account mask. A mask specifies the number and type of characters in each segment and the fill character that might separate segments. Use the Account Mask function to define an account mask, the number of segments in an account number, and fill characters.

These are some examples of account masks:

Account numbers can consist of any combination of alphanumeric characters, but the account numbers must conform to the account mask. To ensure that the accounts are organized correctly in reports and statements, all the account numbers must be the same length. The system forces all account numbers to conform to the mask.

Account segments

Account segments simplify financial reporting and statement setup. For example, you can use segments to show information in financial statements for whatever the segments represent, individual divisions, departments, or subaccounts. You can produce a financial statement for one division or a side-by-side statement for two or more divisions.

Use the Account Segments function to define account segments. When you define an account segment, you specify its value (that is, characters) along with a description.

Use segment 1 numbers to indicate significant groups, assets, liabilities, equity, revenues, and expenses. For example, segment 1 numbers 1000–1999 could be assets, 2000–2999 could be liabilities, and so on.

If you set up subsidiary segments in the account mask, you can set up a description of each segment you use. The segment abbreviation is the name the segment is given on screens and in reports.

For example, if you use segment 2 as 001, 002, and 003, you might enter these descriptions:

001    Minneapolis

002    California

003    Texas

Likewise, if you use departments 10, 20, 30, and 40, you might enter these descriptions:

10    Accounting

20    Administration

30    Sales and Marketing

40    Shipping and Receiving

For several General Ledger reports you can select ranges of segments, and you can specify the order of the account segments. The descriptions you assign appear in the report headers.

Account classes

An account class is the general category an account fits into, for example, long-term asset, current asset, or long-term liability. TRAVERSE has several predefined classes that you can use.

Use the Account Classes function to view account classes and change account class descriptions.

Account types

Account types are predefined by TRAVERSE and contain more detailed information than account classes, for example, an account class of current assets might have account types Cash on Hand, Cash in Bank, and Accounts Receivable. Account types are used to group accounts together to produce statements such as cash flow and trial balance. Each account type has an account class and account code associated with it.

Use the Account Types function to view account types and change account type descriptions.

Before processing data in General Ledger, set up the chart of accounts. A well-planned chart of accounts makes the General Ledger system easy to use, requires little maintenance, and can be expanded as a business grows. Take time to determine the best account structure for your present and future needs.

If you interface other TRAVERSE applications with General Ledger, see the appropriate training manual for information about the accounts you need to post entries from.

Here are some suggestions for setting up your chart of accounts:

• Use the main account numbers and account types to divide accounts into significant groups, assets, liabilities, equity, revenues, and expenses. These groups make it easy to select account categories when printing reports and statements; simply use the appropriate range of account numbers or account types.
• If you use the same account numbering structure for several companies, you can save time by building one company’s chart of accounts and then copy it to each of the other companies. You can also copy budget balances, last-year balances, forecast amounts, and the account mask from one company to another, one division to another, or one department to another within the same company.
• Use the same ranges of segment 1 numbers for the same account categories for all companies. It simplifies setting up the system, and you can use the same sets of statement layouts and contents for all companies when you print financial statements.
• Use memo accounts to record miscellaneous figures that may be useful in preparing statements, for example, to store the number of shares of stock outstanding.

Account Balances

The beginning account balance is the balance at the start of the current fiscal year or quarter. Each of the period balances is the net change in that balance caused by the transactions posted to that period.

The balances you enter should be current at the beginning of an accounting period. If you start in the middle of a fiscal year, use the period that corresponds to the period you start with. Do not start with period 1 unless the starting period is the first period in your fiscal year.

Set up actual balances in the following way:

• To produce a detailed audit trail of your entries, enter the beginning balance for your current (or the year you want to start) as a journal entry into period 12 of the previous year.
• Post those transactions to master.
• Change fiscal year to your current year and run the Update Current Year on the Periodic Processing menu. Later make GL Journal entries for the period balances, and then post them to the GL Master.

Use the Account Budgets function to enter budget and forecast balances using special formulas. To print comparative income statements or balance sheets, you must enter the last-year beginning and period balances.

Print Consolidated Statements

Use the Consol To Account and Step fields in the Consolidate Chart of Accounts function to consolidate balances from one or multiple companies into another company. Consolidated financial statements can be printed without consolidating accounts.

Trial balances

After entering all the account balances, print five Trial Balances, one for actual balances, one for current-year budget, one for last-year balances, one for next-year budget, and one for forecast amounts. Check the Trial Balances for errors and make sure that the amounts balance.

If you enter transactions against one major account and then distribute them to several other accounts, you can set up an allocation record for the major account. In the allocation record specify each account to which transactions are allocated and the percentage that each account receives. The sum of the percentages must equal 100 percent.

Once account allocations records are established, you can enter journal transactions against the major account and indicate that the transaction should be allocated by checking the box in the Allocate field. When you post, the system creates entries as specified in the allocation record.

See Account Allocations for more information.

Journal entries made regularly, every week or every month, are called recurring entries.

To set up groups of recurring entries, use the Recurring Entries function. To copy the recurring entries to the GL Journal table or GL Transactions table, use the Copy Recurring Entries function. To copy recurring entries to the GL Journal table, select that option in the Business Rules function; otherwise they are copied to the GL Transactions table where they can be edited before posting to the GL Journal.

If other TRAVERSE applications are interfaced with General Ledger, some recurring entries may be better tracked through those applications. For example, you can use Accounts Payable to print monthly rent checks and create the proper GL entry.

Run codes

Run codes group particular recurring entries together. You can copy specific run codes and then post all the weekly transactions at the same time.

Assign run codes with care. For example, weekly recurring entries can be assigned a run code of 1, biweekly recurring entries a run code of 2, and so on.

Debits and credits

Each recurring entry must consist of at least one debit and one credit transaction, and the total debits must equal the total credits in a run code.

For each debit or credit, assign a unique reference code, which identifies the item if it needs to be changed or deleted.

Refer to the Recurring Entries function for more information about recurring entries.

Before you begin naming IDs, codes, or accounts, determine general naming conventions to make it easy for the user to find the ID, code or accounts to work with.

When you assign IDs and codes, establish a format that makes sense for your business and use it consistently. The following suggestions may help:

• Do not use these characters in an ID, code, or account: | “ ' & #. *
• To prevent organization problems, use zeros to make all IDs the same length. If IDs are divided into more than one part, the parts should be the same length in every ID. Do not use spaces to divide IDs into more than one part. For example, use ACE-01 and ACE-11 instead of ACE-1 and ACE-11 or ACE 01 and ACE 11.
• If you use letters in IDs, use either all uppercase or all lowercase letters so that the IDs can be sorted correctly.
• Use descriptive IDs. For example, WIN001 and WIN002 are more descriptive than 000001 and 000002.

To sort items by a particular attribute, name or group, put the attribute in the ID. For example, to organize vendors by name, put the first characters of the name of the vendor in the vendor ID.