This article explains the process of entering and importing general ledger journals in automated accounting systems. Learn about the basic validations that must happen before the accounting data can be imported from any internal or external sub-system to the general ledger. Finally, understand what we mean by importing in detail or in summary.
Journals can either be directly entered in General Ledger or can be imported from Sub Ledgers. Most of the journals are created along-with business transactions like sales, purchases, receipts, and payments and get recorded in respective sub-ledgers. As sub-ledgers generally capture data at a more granular level, the relevant accounting information must flow to the general ledger for posting and subsequent reporting. From sub-ledgers, they need to be imported to the general ledger for financial recording and reporting.
Journal Entries can also be created manually in General Ledger by entering all the relevant accounting information. ERPs can also automate certain types of Journal Entries like recurring, reversing, or allocating journals. In case of manual entry follow the steps and guidelines outlined in the Recording Journals tutorial.
While importing journals from Sub Ledgers, journals can be clubbed together for the same accounts and posted in General Ledger as summarized.
Various general ledger systems provide the functionality to create Summary Journals which summarize all transactions for the same account, period, and currency into one debit or credit journal line. This results in fewer transactions in the general ledger systems and makes financial reports more manageable in size. In the case of summary journal users, lose the one-to-one mapping of detail transactions in the sub-ledger to the summary journal lines created by the import process. However most of the organizations use this feature as this prevents too many transactions in GL Accounts and transactions get clubbed based on category, type, or transaction source.
Using the drill-down functionalities available in most of the modern general ledger systems, users can still perform various review and analysis functions, as even if the system creates summary journals, it can still maintain a mapping of how Journal Import summarizes sub-ledger detail transactions from feeder systems into general ledger journal lines.
ERP’s and automated accounting systems must have built in validations during the import process to ensure that the data is correct and complete. An effective Journal Import program should validate key accounting information before it creates journal entries in the General Ledger application to prevent errors and reconciliation efforts.
Given below are some of the common data validations that can happen during the GL Import process:
Suspense posting puts the remaining amount in the suspense account in case the debits and credits of the journal are not matching. In case it is not required, Journal Import should reject all invalid lines that do not balance.
If the batch name is a unique field then Journal Import should ensure that a batch with the same name does not already exist for the same period in the General Ledger application. Similarly, it must also check to ensure that more than one journal entry with the same name does not exist for a batch.
Attributes that can be validated to ensure that journals contain the appropriate accounting data could be accounting books, period, source, currency, category, accounting date, reversal period, account validation, account code combinations, effective date, roll date, and any other required validations.
In today’s accounting world, financial and operational data typically is stored in a variety of programs and formats. Excel is one of such tools, most widely used by the accountants! When accountants need to prepare a report based on data from various systems, the first step is to export the data into Excel. Many times accounting information is stored in chronological order in excels by the accountants, and examples include adjusting entries and recurring entries.
Benefits of using the excel upload feature are that it makes life much easier for data operator and accounts executives. The great flexibility of excel based application increases productivity and results in reduced training costs as most users are already familiar with the excel functionalities and also improves user acceptance for automated systems. The biggest benefit comes from the fact that excel upload can also work in disconnected environments.
Typically, most of the automated systems provide the functionality to import accounting data from Excel to the general ledger and create journals. Most ERPs provide the ability to upload journals using the MS Excel worksheet. You can create journals in Excel Template and upload directly to General Ledger.
Functional Organizational Structures
A functional organizational structure is a structure that consists of activities such as coordination, supervision and task allocation. The organizational structure determines how the organization performs or operates. The term organizational structure refers to how the people in an organization are grouped and to whom they report.
What Is a General Ledger? General Ledger (also known in accounting as the GL or the Nominal Ledger) is at the heart of any accounting system. A general ledger is the master set of accounts that summarize all transactions occurring within an entity. Ledger is the skillful grouping and presentation of the Journal entries. Learn the accounting fundamentals, general ledger process, and general ledger flow.
GL - Different Type of Journals
Two basic types of journals exist: general and special. In this article, the learner will understand the meaning of journalizing and the steps required to create a journal entry. This article will also discuss the types of journals and will help you understand general journals & special journals. In the end, we will explain the impact of automated ERPs on the Journalizing Process.
Trial Balance in General Ledger
One of the greatest benefits of using a double-entry accounting system is the capability to generate a trial balance. What do we mean by trial balance? As the name suggests a trial balance is a report that must have its debits equals to credits. Understand the importance of trial balance and why it is balanced. Learn how it is prepared and in which format.
Divisional Organizational Structures
The divisional structure or product structure consists of self-contained divisions. A division is a collection of functions which produce a product. It also utilizes a plan to compete and operate as a separate business or profit center. Divisional structure is based on external or internal parameters like product /customer segment/ geographical location etc.
Global Business Services (GBS) Model
Global business services (GBS) is an integrated, scalable, and mature version of the shared services model. Global Business Services Model is a result of shared services maturing and evolving on a global scale. It is represented by the growth and maturity of the Shared services to better service the global corporations they support.
Team-Based Organizational Structure
Team-based structure is a relatively new structure that opposes the traditional hierarchical structure and it slowly gaining acceptance in the corporate world. In such a structure, employees come together as team in order to fulfill their tasks that serve a common goal.
GL - Journal Posting and Balances
In this tutorial, we will explain what we mean by the posting process and what are the major differences between the posting process in the manual accounting system compared to the automated accounting systems and ERPs. This article also explains how posting also happens in subsidiary ledgers and subsequently that information is again posted to the general ledger.
GL - Review & Approve Journals
Review and Approval mechanisms ensure that the accounting transaction is reasonable, necessary, and comply with applicable policies. Understand why we need review and approval processes, what are they, and how they are performed in automated general ledger systems. Learn the benefits of having journal approval mechanisms in place.
There are five types of core accounts to capture any accounting transaction. Apart from these fundamental accounts, some other special-purpose accounts are used to ensure the integrity of financial transactions. Some examples of such accounts are clearing accounts, suspense accounts, contra accounts, and intercompany accounts. Understand the importance and usage of these accounts.
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