General Ledger

Instructor: MANISH CHAUHAN

Objectives
To enable you to: Carry out the core configuration of the General Ledger Understand the core business processes within GL.

Contents
Setting up a Company Multiple Locations & Responsibility Centres Accounting Year/Period GL Set Up Chart of Accounts Journal Entry System Bank Management Dimensions Budgets Account Schedules Multi Currencies Account Closing Consolidation

General Ledger

What is GL?

General Ledger
The General Ledger is the central repository and ultimate destination for all transactions occurring in the organization in the form of corporate financial information. The main purpose of a general ledger system is to collect information through the chart of accounts and prepare financial & management reports from it.

General Ledger
The main activities carried in General Ledger are: Capturing transactions in General Ledger and processing them Incorporating transactions from other applications integrated with General Ledger, and processing them. To be able to carry out these activities the it is essential to create master information.

Sequence of Data Entry for Masters

Company Set Up Financial Years & Periods Chart of Accounts Bank Details Dimensions, to capture additional information

Setting up of a Company
Company specific information in the General Ledger setup. In the Company Information window, you set up a company's general information. The program uses this information to print company information on document headers. General tab- name and address details Communication tab- communication details Payments tab- primary bank. Shipping tab- ship-to address that will appear on all purchase orders. Location Code- default delivery location when you purchase items.

Multi Location
Location is defined as a physical place where items are produced, handled and stored before being sold. Eg. a production plant warehouse a distribution center Address information held on the location card will be printed on the purchase documents to notify vendors which locations they should ship the ordered items to.

Responsibility Centre
A responsibility center can be a cost center, a profit center or an investment center. Eg. Sales Office, Purchasing Department for several locations, and a Plant Planning Office. You set up responsibility centers to help administer your business. For example, a responsibility center can administer sales and purchases for one or more warehouses or distribution centers, where goods are handled and stored prior to use. The functionality provides the ability to tie a user to a responsibility center so that only sales and purchase documents related to the particular user are displayed.

Base Calender
Set up calendars with working and non-working days. A base calendar can be assigned to Customers, Vendors, Locations, Company, Shipping Agent Services and to the Service Management Setup. It is possible to add changes to the base calendar for each of the above-mentioned. The calendar entries will be used in the date calculations on Sales orders, Purchase orders, Transfer orders, Production orders, Service orders and in the Requisition Worksheet and Planning Worksheet.

Accounting Years & Periods

Define any starting date for the fiscal year and specify your own accounting periods with an unlimited number of periods of any duration. Use filters to view and print financial data across periods, regardless of starting and closing dates. The program does not limit data entry. Even if a period is closed, data entry is allowed. The entry will be marked as a "prior period entry." Because there are no "hard close" or "buckets," the program is date sensitive and will allow you to make entries into any of the existing periods.

General Ledger Set Up

You use the General Ledger Setup window to enter information about how you want to handle certain accounting issues in your company. You can control the date range that all users can use for posting by completing the Allow Posting From and Allow Posting To fields to allow specific entries to be posted. Number series used to assign numbers to bank accounts. Select the two global dimensions that you will use the most frequently in your reports. You can also select your shortcut dimensions. The program automatically creates first two shortcut dimensions using the Global Dimensions. You can specify the currency that will be used as an additional reporting currency in the General Ledger application area. This enables you to print reports in either LCY or the additional reporting currency.

General Ledger Set Up

Invoicing Rounding When creating invoices, it may be necessary to round invoice amounts. Local regulations or local custom may require the invoice to be rounded in a specific way (for example, to an amount divisible by 0.05). When the program rounds an invoice, it inserts an extra line with the rounding amount and posts this line along with the other invoice lines. Here you can specify the size of the interval to be used when rounding amounts in your local currency.

General Ledger Set Up

Payment Tolerance Variation which will be permitted when transactions are posted. The variation limit can be an absolute amount or percentage whichever is lower. Specify a default tolerance posting method.
a special GL account set for tolerance tolerance amount posted as a payment discount posted as a remaining amount

Chart of Accounts
The core of a company is the chart of accounts, that is, the list of the G/L accounts to which all G/L entries are posted. You use the Chart of Accounts window to enter and view your G/L accounts and account balances. The drilldown features in the program allow you to see the ledger entries that make up the balance of an account. You create the chart of accounts in the same way you create new G/L accounts. You can set up new G/L accounts in the Chart of Accounts window (displayed below) or in the G/L Account Card window.

Chart of Accounts
No. field - maximum of 20 alpha-numeric numbers. Name field 30 characters or less. Income/Balance field important in determining what accounts will be closed at the fiscal year end. Debit/Credit field - to determine the normal type of transactions that are made to this account. Account Type identifies purpose of the account Reconciliation Account - G/L account included in the Reconciliation window to reconcile the accounts being posted to in the journal. Automatic Ext. Texts field text description that will be added to sales and purchase documents. Direct Posting field This field indicates if it is allowed to post directly into this account from a journal line.

Posting Groups
If you use other application areas in addition to General Ledger and therefore post to accounts such as Customers, Vendors, Items or Resources you need to set up a link between these accounts and the G/L accounts. There are two major types of posting groups that deal with selling inventory and resources to customers and buying inventory from vendors: Specific Posting Groups General Posting Groups.

Specific Posting Group

The primary purpose for Specific Posting Groups is to identify the primary Balance Sheet Account for each supporting Ledger. For instance, the total outstanding accounts receivable balance of all of the customers should tie to the total balance of the Accounts Receivable accounts in the Balance Sheet. Therefore, specific posting groups are assigned to Customers, Vendors, Items, Bank Accounts, and Fixed Assets. These posting groups create the direct link to the primary Balance Sheet Account for each Master Item.

General Posting Group

There are two kinds of General Posting Groups: General Business Posting Group specifying who we sell to (Customers) and who we buy from (Vendors). General Product Posting Group specifying, what we sell (Items and Resources) or what we buy (Items).

General Business Posting group

When setting up business groups, you must consider how many groups you need for breaking down sales by customers and how many groups you need for breaking down purchases by vendors. The business groups can be set up to group customers and vendors by geographical area or type of business.

General Product Posting group

The Product Posting Groups as shown above are broken down into Raw Materials, Retail, Resources, Capacities, Miscellaneous with VAT and Miscellaneous without VAT. The Product Posting Groups provide the major product groups that will be reflected in the Chart of Accounts. Each Inventory Item and Resource set will be assigned a Product Posting Group.

General Posting Set Up

The General Posting Setup window is a matrix that combines business and product posting groups. With each combination the user can determine to which accounts the program will post. As a result, it is possible to post the sale of the same item to different sales accounts in the G/L due to customers being assigned different business posting groups.

Indent Function
Used to format the Total, Begin-Total and End-Total fields and to indent accounts according to the defined hierarchy. The hierarchy is established using the account types Begin-Total and End-Total. Account numbers between these will be included in the end-total range in the Totaling field.

Journal Entry System

Journal Template
Journals are typically used for different types or groups of entries, such as purchases, payments, sales and receivables. Each journal type is set up with its own journal template. The various journal templates can be chosen from four of the application areas:
General Ledger: General Journals Sales & Receivables: Sales Journals, Cash Receipt Journals Purchases & Payables: Purchase Journals, Payment Journals Fixed Assets: FA G/L Journals

Journal templates provide the basic journal structure where you can specify default settings and information for all batches created using the template.

Journal Batch
Journal Batches are created based on the journal templates. All journal batches created from a specific template will have the same structure, default settings and information defined in the template. However, as these settings are only defaults, it is possible to change them for a specific journal batch. Batches are typically used to separate one user's entries from another or it could be for a specific voucher type.

General Journal
Use your general journals to post to g/l accounts, bank accounts, customer accounts and so on: Set up and unlimited number of journal batches, for example, per user or for specific purposes. Define rules for each individual batch, for example, you can assign a default balancing account . Force documents to balance for each document type and document number before a journal can be posted. Print a test report that highlights any corrections that need to be made before posting the journal. Present your journals as you please. Using the Show/Hide function, you can select which fields are shown in the journal window.

Source Code
Source Codes are used to assist the user in finding the point of origin for an entry (audit trails). Source codes are assigned to transactions. Each journal can have a source code Apart from the system defaults, as new journals or data entry points are added, then a source code should be added as well to identify where the transaction originated. Entries are created when journals and invoices are posted and when certain batch jobs are executed. There is a specific source code for each posting type and batch job, and it is assigned when individual entries are created.

Reason Codes
Reason Codes are used to explain why an entry exists. For example, if you must return items from a sale you can set up a reason code to denote the reason such as damaged, wrong color, wrong size, etc. After you set up reason codes, you can add the reason code field to the journal or other window.

Number Series
You use the No. Series window to set up all the number series that you will use for your company. In the setup table for each application area and in the journal templates, you specify which No. Series will be used for which purpose. First, you enter a code that is meaningful or relevant for your business, and then give the code a description. The program fills in the Starting No. field and Ending No. field with the information set up in the Number Series Line table. The Last Date Used and Last No. Used fields are filled in automatically by the program, when you start using the No. Series. In the Default Nos. field, you indicate whether or not this number series will be used to assign numbers automatically.

Number Series
A check mark in the Manual Nos. field indicates that you can enter numbers manually instead of using the number series. A check mark in this field has no effect for number series used in journals. A check mark in the Date Order field indicates that numbers from this range are to be assigned chronologically. In other words, if you place a check mark here, the program will run a test at the time of posting to make sure documents and journal lines are assigned numbers in ascending order according to the posting date.

Projected Cash Flow

The "Receivables-Payables" column in the Chart of Accounts screen provides a summary of expected net operational cash flow from customers and vendors over time. It is simply a summary of the open customer and vendor ledger entries sorted by their Due Date instead of Posting Date. You can specify the period you wish to view, such as daily, monthly, quarterly and so on. If you wish to see the expected net balance of outstanding customer and vendor balances at any particular date, you should choose the Balance at Date view. If you wish to see the expected cash flow movement for a particular period, you should choose the Net Change view.

Bank Management
Manage an unlimited number of bank accounts in both local and foreign currencies. Cheque Writing with unique number series for each bank account. An already printed check can be voided or reprinted. You can specify on the journal line whether you want the payment to be made with a computer check or a manual check. BRS (Bank Reconciliation system) enables you to reconcile your bank accounts in Navision Attain with the banks statements. You can apply amounts from your bank account ledger to the reconciliation form and keep track of all bank statements.

Dimensions
A dimension is data that you can add to an entry as a kind of marker so that the program can group entries with similar characteristics and easily retrieve these groups for analysis purposes. Dimensions can be used throughout the program on entries in journals and documents, as well as budgets. Define an unlimited number of dimensions and dimension values at any time. Name dimensions as you please, so that your dimensions setup reflects the specific needs of your company at all times. Add new dimensions without disrupting your accounts structure in any way because:
You set up dimensions and dimension values in their own tables. Their underlying values are independent of your chart of accounts.

Dimension Hierarchies
Set up dimension value hierarchies to reflect your reporting and accounting needs because: The intuitive hierarchy setup closely resembles the setup procedure for your chart of accounts You can include totaling values and formulas that allow an unlimited category tree. You can filter data to obtain the level of dimensions information you require. Maintain dimension value hierarchies independently of your chart of accounts. You can maintain a highly detailed reporting and accounting hierarchy without having to create and manage a cumbersome range of accounts and sub accounts.

Dimension Rules
Defaults: apply default dimensions to specific accounts, groups of accounts, or entire account types. You can set up defaults as either suggested or mandatory. Combinations: define how dimensions and dimension values may or may not be combined in journals and documents. You can define combinations at the dimension or dimension value level. For example, some salespeople may be excluded from using certain customersegment dimension values. This helps ensure that policy decisions made in your company are also reflected in your accounts. Prioritization: define prioritization of account types when an account and a balancing account suggest conflicting default dimension values for the same dimension. Blocking: block and unblock dimensions and dimension values from use depending on whether the dimension or value is still required (with regard to seasonal variations, campaigns, and so on).

Dimension Input
Define up to eight shortcut dimensions for use throughout the application. Shortcut dimensions are dimension fields that can be shown or hidden on journal and document lines to make the input of dimensions data as straightforward as possible. Shortcut dimensions can easily be switched or replaced to include new dimensions and accommodate new needs. Enter all other dimensions data in a separate Dimensions window using a conveniently located button on all journals and documents. Use defaults to reduce manual data entry and ensure that the desired dimensions data is always posted.

Dimensions on GL entries
Define two global dimensions for use throughout the program. Use these global dimensions to view and filter all G/L entries in the General Ledger Entries window. For non-global dimensions, you can filter G/L entries using the analysis view.

Analysis Views
Use analysis views to investigate relationships and monitor performance. You can define and name as many analysis views as you wish. Gather and view posted G/L entries for immediate analysis by attributing characteristics to the information you record in your daily work. Make general analysis much easier to understand by compressing analysis view entries so you see only totals (based on a vast number of G/L entries). Sort and gather all G/L entries with at least one of up to four dimensions specified for each analysis view. For example, you might create an analysis view that gathers all G/L entries for departments operating in specific geographic areas, excluding those entries relating to a particular sales campaign.

Analysis Views
Update the GL entries included in an analysis view manually to gather new G/L entries posted since the last update, retain saved versions of an analysis view without new updates, or have the program update an analysis view each time a G/L entry with the specified attributes is posted. Present the contents of an analysis view in a matrix form in the Analysis by Dimensions window. Uncover the factors involved in creating particular results or relationships. You can drill down from analysis view entry totals to each individual analysis view entry, and then further still to the specific G/L entries that comprise a particular analysis view entry.

Budgets
Once you have created a budget, you can print a balance compared to the budget showing variances by percentages. You can work with several budgets. Budgets are normally entered per period for the relevant G/L accounts. You can create, copy and work with any number of budgets at the same time. You can work with, for example, a 100% budget, a 110% budget, and so on. Budget Follow Up through GL Balance/Budget Window.

Budget by Dimensions
Attach an infinite number of dimensions to each budget entry. Filter your budget by up to four dimensions in order to: Create very specific sub-budgets (within an overall budget), such as a sales budget for a particular customer target group per department over a specified period. Compare G/L entries and budget entries by dimensions using the Analysis by Dimensions window.

Account Schedule
Used for financials reporting. You can arrange reports based on the figures in the chart of accounts and budgets, but with a different arrangement of financial figures, texts or detail than in the chart of accounts. The Account Schedules granule is like a filter for the chart of accounts that enables you to choose the accounts that you want to include (or not include). You can also use it to change the order of the accounts or combine the figures in various ways, and you can set up which columns to print. In addition, it is possible to make simple calculations.

Recurring Journals
Use recurring journals for frequent transactions, whether they are of fixed or variable amounts. You can also set an expiry date for when a series of recurring posts should end.

Allocations
Allocate general ledger entries to combinations of accounts, departments and projects using allocation keys. The allocation keys can be based on amount, percentage or quantity. Allocations can be used for many purposes, for example, when allocating overhead (such as rent) to company profit centers.

Multiple Currencies
Define an unlimited number of currencies and add or delete currencies at any time. Handle the way in which foreign currency amounts are rounded and posted to the database. Define rounding precision for amounts, invoice amounts, unit amounts and application amounts. Determine how amounts are shown on screen by specifying how many decimal places should be presented for an amount. Define decimal places for amounts and unit amounts.

Exchange Rates
Define periods for specified exchange rates. A period can be as short as one day. Set up relational exchange rates in the format applicable in your country. Define specific exchange rates for daily transactions and specific exchange rates for the adjustment of balance sheet accounts. Run a batch job to take account of adjustments to exchange rates in a specified period. Adjust customer, vendor and bank accounts and specify that the program make adjustments to G/L accounts that use an additional reporting currency. Maintain a full record of exchange-rate adjustments. Compare rates and post corrections to previous postings using accurate historical exchange rates.

Additional Reporting Currency

Maintain general ledger in two different currencies so you can view balances online and print financial reports for two currencies simultaneously. Use an additional reporting currency in order to operate and report to authorities as needed. Maintain a foreign currency as your base currency to align your accounts with the currency used by corporate headquarters.

Annual Closing
Close Financial Year Transfer income statement balances to your balance sheet with ease using the Close Income Statement Closing entries can be created per business unit, department code and/or project code or per G/L account, and are retained by the program in a specified journal for scrutiny before posting. The batch job can be carried out as many times as necessary so you can make corrections to your income statement even after transferring balances to your balance sheet. Securely close your fiscal year while retaining the flexibility to ensure correct accounting data. Post prior-year entries and adjusting entries even though a fiscal year is closed. Both entry types are marked, making them easy to view and filter on.

Consolidation
Consolidate companies can come from one or from several different Navision Attain databases or from another type of file. There are facilities for imports and exports of financial information in the Consolidation granule. If the data used is retrieved from several Navision Attain databases, the granule is only used in the parent company itself.

Consolidation

Change Log
Enables you to log user changes made to Navision Attain master data. It is possible to log all direct modifications a user makes to the data in the database, except changes to working documents such as journals and sales and purchase orders. The change log functionality makes it possible to get a chronological list of all changes to any field in any table (except the above mentioned) and to see who (what user ID) made the changes.