General Ledger Analysis

[Vira Bhakta]

GeneralLedger analysis provides a means of distributing transaction values to ledger accounts together with analysis information. This reduces the need to create individual ledger accounts for certain categories of expenses such as travelling, repairs and maintenance, general expenses or donations for example. It also eliminates the need to manually analyze such General Ledger accounts.

GL analysis entries are only posted from sub modules if the sub module is linked to the General Ledger in detail at company level (General Ledger Integration) or at ledger account code level (General Ledger Codes or GL Structure Definition).

You will not be required to enter GL analysis entries for accounts defined in the General Ledger Integration setup programs for General Ledger integration. This means that when you process a transaction and an account specified in a General Ledger Integration setup program is automatically used in the transaction (i.e. you do not manually enter it) then the analysis requirements are ignored for that ledger code.

When you define an account type as requiring analysis and you use the General Ledger Codes program to add a ledger code with that account type, a message is displayed to remind you that analysis may be required for that ledger code.

Use either the General Ledger Codes or GL Structure Definition program to indicate the ledger accounts against which analysis is required and to define the analysis category to use for that specific ledger code.

In addition, if you want to process analysis entries from sub modules, then the General Ledger integration method for the sub module(s) must be set to detail either at company level (General Ledger Integration) or against the individual General Ledger account code(s) (General Ledger Codes or GL Structure Definition). Failure to do this results in analysis entries not being posted.

Whenever you process a transaction containing a General Ledger code for which G/L analysis is required (see General Ledger Codes or GL Structure Definition) then the program is displayed either when you post the transaction, or when the transaction value is distributed to one or more ledger codes.

In this example, all five category types were used. You could, however have combined FUEL and OILS into one category type. Alternatively, you could have defined only one category type: REGISTRATION and processed all expenses for a specific vehicle (irrespective of the type of the expense) to that vehicle's registration number.

Business owners (or their accounting team) perform G/L reconciliations while closing the month. The reconciliation process is an internal control that can explain discrepancies between different account balances or records. In many cases, differences may be due to error (and some, fraud), but others could occur due to timing issues.

With your documentation in hand, review each account for accuracy. Make sure all transactions follow GAAP and company policy. For example, check that you have entered all invoices completely and correctly into the A/P subledger.

Always leave a paper trail when performing your reconciliations. If you must revisit transactions from this month, having records makes the process much more manageable. In addition, it helps you streamline future reconciliations by formalizing your reconciliation process.

With CFO Hub, your general ledger is in good hands. Our professionals can swiftly reconcile your general ledger, identify errors, and spot potential fraud before it happens. Contact us today for a free, no-obligation consultation.

This General Ledger Analysis Tool has been developed to help you determine your General Ledger structure, summarize the complexity of detail required for major accounts and where streamlining efforts may have the highest returns. The tool uses importance (size), number of fields (amount of data required) and efficiency potential (number of transactions) to help you determine how to improve you general ledger and account analysis.

The general ledger allows accountants and business managers to make informed analyses about the business, by looking at transactions that are arranged by different financial aspects of the business, such as its assets and liabilities, equity, sales, cash, and expenses.

Each category has its own separate accounts which record specific transactions. These are referred to as subledgers or subledger accounts. For example, assets may include a cash account, accounts receivable, inventory, investments, and fixed assets.

In addition to the chart of accounts, the general ledger also includes financial transactions, account balances, and accounting periods. Together they comprise the four main components of the general ledger.

The general ledger follows the double-entry system of accounting. According to this system, which has been widely used for centuries, every transaction has an equal and opposite effect in at least two different places. Every transaction will be represented by a journal entry in at least two different accounts. The two entries will always balance out.

The general ledger serves a number of important functions for the business. It helps accountants prepare a trial balance to make sure that all debits and credits balance out. This process helps accountants identify errors, unusual transactions, and fraud, and it provides an opportunity to make corrections.

The general ledger is especially important because it allows the business to produce financial statements, like income statements and the balance sheet, which provides detailed information for accountants, managers, and investors to make informed analyses about the business and its performance.

Income statements focus on how much revenue was earned by the business for a particular point in time. In simple terms, they list the gross, or total amount of, sales revenue generated by the business for the period, minus the costs associated with those earnings to determine the net earnings or bottom line.

Cash flow statements focus on the exchange of money between the business, its customers, and its vendors. It does not look at assets and liabilities or profit and loss. It only examines the ability of the business to generate cash. Cash flow statements will list all manner of financial activities that impact cash, such as accounts receivable, accounts payable, inventory, unearned revenue, and net income.

Request a demo a demo and see how accountants can quickly compare general ledger, bank, and other data, investigate discrepancies, attach supporting documentation, and take required actions from an intuitive, unified workspace.

Following the end of a financial reporting period, an accountant or team of accountants is responsible for conducting general ledger reconciliation. This means that the team goes through each account and checks it against third party statements, like bank statements and credit card statements to ensure they reflect one another.

With data coming from various sources, the data may appear in a variety of formats. Some companies will pull from multiple ERP systems, internal databases and bank accounts. When you factor in the time it takes for a person to manually pull the right data, you see how easy it is for inefficiency to occur.

The general ledger reconciliation process consists of aggregating data, comparing records, updating information, investigating discrepancies and documenting the process. In many instances, a bookkeeper or accountant performs reconciliation.

Put simply, general ledger reconciliation software automates the entire process so that you need little to no human intervention. The software compiles data from all sources (i.e. ERP, bank statements, credit card statements, general ledger systems). It transforms data to be formatted in the same structure for easy comparison.

Software solutions can save accounting teams about 50% of their time and resources that would otherwise be dedicated to bank reconciliations alone. The market is growing rapidly and automation solutions like SolveXia are meeting needs to transform finance automation by providing teams with a full suite of benefits, including:

General ledger reconciliation is a process that every business manages. Rather than wasting time and risking meeting regulations through manually performing the process, you can leverage the power of automation tools like SolveXia. Reconciliation software will maximise efficiency, centralise data, automate reconciliations, and store data to create real-time visualisations, reports, dashboards and credible audit trails. See how automation solutions can work for your business by scheduling a demo.

This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies. Read our privacy policy to learn more.

a. To convert formulas to values, select each column that contains formulas, copy those columns, and paste them to the same locations using the Paste Values command. This action will convert all formulas in the column to values. (If you are unsure of whether your imported general ledger contains formulas, you can search the worksheet for equal signs to identify the presence of formulas and make a note of those columns containing formulas.)

b. To clean and format the data, select the entire worksheet and, as necessary, do the following: Make all fonts and font colors the same, remove all borders and underlines, remove all hyperlinks, format cells containing numbers as values, format cells containing dates as dates, adjust all columns to the appropriate widths, and adjust all rows to the same height. If necessary, remove any merged cells by selecting the entire worksheet, then right-click anywhere on it and select Format Cells, Alignment, and clear the box labeled Merge cells.

c. The process of repeating the report's account numbers and labels for each transaction row requires a simple but clever trick, as follows: As illustrated in the simplified example in the screen shot "Repeating Numbers, Labels for Each Transaction Row," the objective is to repeat all account numbers and/or descriptions (circled in red) for each transaction row (highlighted in yellow).

3a8082e126