Accounting Ledger Questions

[Demeter Exekutor]

Myaccountant wanted to see the detailed general ledger report of all the individual transactions that occured during the fiscal period. I submitted the General Ledger Transactions report and received the following comment:

They are referring to seeing every transaction in a Journal format - the transactions debits and credits together.

Unfortunately no, but provide them with a copy of the Trial Balance, this highlights the double entry at work.

I have some new information after speaking with my accountant and letting them take a look at Manager. The lack of a detailed general ledger with double entries and reference numbers does not meet the minimum accounting reporting requirements for Singapore. They specifically need a detailed general ledger with double entries and reference numbers as the minimum requirement. After looking through the Manager forum, it appears others need this report as well.

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We need to split our meals categories between 2 different GL codes, 50% to taxable and 50% to non-taxable. This is a requirement for Canada and the US when doing tax reporting and I'm thinking there must be a way to do this but I was told there is not. Currently, we are exporting our GL and then manually reclassing.

@mhazlitt Hi! You definitely can have a hierarchy set up for your ledger. This would need to be set up on our side, and then you would then populate the Account Codes once the ledger is set up. I am attaching a Tech doc for you and it explains how you can have it set up and also has screenshots for you too! Let us know if you have more questions once you look at the document.

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You can use the itemization option to do this. You would need to set up a meal expense type for when the meal is taxable and another when it is not. For example: Breakfast - Taxable as one expense type and then simply Breakfast. You could repeat those expense types for all meals. Then you would need two more expense types; 50% Taxable and 50% Non-taxable. The user would then itemize those meals that fall under taxable by using these two expense types. Since each expense type in the system is required to have a GL Code, you would then have taxable meals split between two GL codes when the users itemize. I'm providing some generic examples of expense types, but I think it gives you a good idea.

@mhazlitt We have 3 GLs for meals/entertainment and 6 expense types. One GL for 0% nondeductible, 50% deductible, and 100% deductible. In Concur, I have assigned to each of the 6 expense types the GL that reflects how we need to account for it for tax purposes. We are able to review the data from Concur on a level of the 6 different expense types, and then on the GL only see the 3 accounts for tax purposes. Its been working besides occasionally needing to adjust the Expense Type selected, but this is mainly due to the end user maybe not being fully aware of the parameters we need for tax filing.

When it comes to accounting, a ledger is a book and/or digital book that records transactions for different accounts. You might also hear this called a principal book of accounts, general ledger, sales ledger, purchase ledger. Your company may have one ledger or multiple ledgers, with entries that range from cash and accounts receivable to inventory and accrued expenses.

A journal entry is created any time your business makes a transaction, so that it can be recorded in your books. Your journal is a sequential list of all business transactions, line itemed to include information like date, account name, amount, and a general description of the transactions.

The key difference between a general ledger and a subledger is that the general ledger is your master, meaning it holds information on all accounts, while a subledger can be used for a collection of subaccounts.

Accounting best practices dictate that you should use accounting software for your ledger. However, some businesses will elect to maintain a handwritten ledger as well, partly because it was the way of accounting for so long, and partly as a backup. However, one key thing to remember is that the more times you have to manually input the same data, the more opportunity you are creating for error.

A trial balance is the current final balance of each account. While your ledger will be pages and pages long, the trial balance is simply the totals for each account. A trial balance lists the closing balance from your ledger accounts (shown as either a credit or a debit).

Your trial balance is usually calculated at the end of an accounting period (commonly monthly, quarterly, and yearly). This helps your company understand whether you are operating at a positive or negative.

While they contain similar information, an accounting balance sheet and a general ledger are very different. While a general ledger includes detailed history for all accounts and a running record of transactions, an accounting balance sheet offers less detail and is used to show what a company owns and owes.

An accounting balance sheet is useful for things like loan approval, and does not have as much detail, nor is it divided into multiple pages. It can be useful to show to potential investors, suppliers, government agencies, and creditors, and can be used for forecasting.

A General Ledger Report (commonly called a GL Report), includes account summaries, transaction details, and activity history for all of your accounts. The GL Report will list account numbers, transaction information, date, amounts, details, and notes.

This depends on the details of your company. Large companies may employ a General Ledger Manager or team of Ledger Managers to monitor and upkeep the ledger. For mid-sized companies with in-house accounting teams, this typically falls under the role of a bookkeeper or accountant. For small and many mid-sized businesses, an outsourced CPA or bookkeeping team is hired to manage the ledger and ensure the following of best practices.

Rather than looking for a template, we recommend speaking with your CPA, or consulting with a bookkeeping firm to get your ledger set up and running accurately from the get-go. We often get asked about Bookkeeping Cleanups, even from companies using Quickbooks.

We are looking to start using the Project module to track some contract R&D projects we do for customers (both fixed price and time & materials) and some internal investment projects. This is a small portion of our main business, which is manufacturing, so will only be used for a relatively small number of projects per year. I've looked through the TechNet set up guides and various blogs online, but nowhere can I find any kind of a guide to what General Ledger accounts the various types of Project Groups need to have configured. I've found bits and pieces for various project types, but no high level overview or examples that cover all the group types. Can anyone recommend a good set up guide or offer some tips? I've got Murray Fife's book, but it's heavy on showing the steps involved, but essentially nothing on WHY you're doing it and what the implications are.

For 1) You are right that fee transactions are used for billable amounts without associated costs. However, at the time the fee journal is posted, there is no ledger voucher generated because this voucher is generated at the time you post the invoice. The only thing that a fee journal does is recording a transaction that can in a second step be invoiced.

For 2) You can use the pending vendor invoice form also for service transactions. This requires that you make use of a procurement category that is linked to a project category. I know that this is a hurdle for some accountants who are used to enter account numbers but you can overcome this fear for example by including the account number into the project category name.

You can of course, continue using journals for recording invoices but be aware that you might see those costs late at a project, which is not an issue as long as you have fast invoice throughput times. Yet, I experienced a situation where an invoice >1 mio requires a long time to get approved. Because the company also used journals and not the pending vendor invoice form, the saw the costs late - too late - at the project level. So, just keep this issue with the committed project costs in mind if you want to use journals.

You use this setup for longer running projects where you need a periodic match between costs and revenues. What happens here is that all costs are posted to a P&L account. At the same time, a revenue accrual is created based on the expected sales price. At the time an invoice is created, the revenue accrual is reversed and replaced with the actual invoice revenue account setup in the project posting profiles.

I have not seen this often in practice. What happens with this setup is that all costs are 'stored' in a WIP account in the balance sheet until you invoice the customer. At the time the invoice is created, the WIP postings are reversed and shifted to the project cost accounts. At the end of the day, you can compare costs and revenues at the time an invoice is created.

For 1) My very limited understanding of the fee journal was that it was for recording billable amounts, without associated costs, which were outside the contracted sales amount. For example, if you needed to bill the customer a late fee on an earlier invoice. I'm very surprised there's no ledger transaction created to record the unbilled revenue when the fee journal is posted. That makes the purpose of that journal even less clear. Yes, I did mean expense journal when I said Time & Materials. That one also is confusing, because the TechNet documentation makes it seem like you can only use it to record for the project expenses which are shared with the Travel & Expense module.

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