An account inquiry is a review of any type of financial account, whether it be a depository account or a credit account. In this tutorial, you learn what we mean by drill through functionality in the context of the general ledger system. We will explain the concept of drill-down and how it enables users to perform account and transaction inquiry at a granular level and the benefits of using this functionality.
In information technology, to drill down means to move from summary information to detailed data by zooming in on something. In an ERP environment, "drilling-down" may involve clicking on some account balance or summary representation in order to reveal transactional data.
To drill down is to navigate through a series of steps, for example, the user starts with the summary balances that are made up of a group of accounts with individual balances, and drill down takes the user through the hierarchy to the individual account balances. The individual account balances are made up of transactions that have been posted in those accounts for a specified period and further drill down at this second level takes the user to the set of transactions. These steps of moving from summary balance to account balance belong to the general ledger system, however, the transactions might have originated from a subsidiary ledger. Further drill down at this level will take the user to a level of greater detail where the user can see the original transaction in the sub-ledger itself. Here in the drill-down process, the user is navigating from a higher level of consolidated information to a deeper level into data, without leaving the source system or changing user access.
When one drills down, one performs de facto data analysis on a parent attribute and inquiry of the detailed attributes that constitute the parent attribute. Drilling down provides a method of exploring multidimensional data by moving from one level of detail to the next. Drill-down levels depend on the data granularity and drill-down is a sub-function of inquiry and analysis. Drilldown functionality allows business users to gain better business insight to make critical decisions in order to beat out their competition.
Upstream Systems: In geography, upstream literally means towards the source of a stream or river, or against the normal direction of water flow. In the context of general ledger, upstream systems refer to the systems that send data to the general ledger system. In other words, upstream systems are subsidiary ledgers and other source systems that are capturing the transactional data and sending the accounting data to the general ledger for further processing.
Downstream Systems: Similarly, in geography, downstream literally means away from the source of a stream or river, or in the normal direction of water flow. In the context of the general ledger system, downstream systems refer to the systems that take data from the general ledger as their input. Some examples are consolidation systems, enterprise performance management systems (EPM), reconciliation systems, or business intelligence systems. The financial data from the general ledger are carried over as input for these downstream systems for further processing.
In the advances general ledger systems, users can drill down to sub-ledgers details from General Ledger and can get all of the transaction details that comprise an account balance, regardless of which sub-ledger originated the transaction. This functionality helps in analyzing any account balance by understanding the source of the transaction and viewing additional information that has been captured in the source system and not imported into the general ledger system.
Many advanced EPM or Consolidation downstream systems provides the users with the capability to drill down from their system to underlying Enterprise Resource Planning (ERP) transaction data. Some examples with the ability to drill down from Enterprise Performance Management (EPM) applications are Oracle Hyperion Financial Management System and Oracle Hyperion Planning. An example of a consolidation system is Oracle Financial Consolidation Hub. These systems allow the user to drill down from consolidated information to the related general ledger system. This provides users with greater visibility into business processes and a greater understanding of the consolidated data.
For most organizations, the basis for global financial consolidation, reporting and analysis, planning, budgeting, and forecasting are derived from a company's existing operational information which is generally stored in many different general ledgers like Oracle, SAP, PeopleSoft, or JD Edwards systems and drill down allows the user to see the actual data in the various general ledgers that constitute the data in these systems.
There are various drill-downs that are available in the general ledger system. We will briefly explain each one of them:
A Drill-Down Report is also called an Interactive Report and has more detail and capability to analyze and inquire data at a granular level. For example, the user is looking at the Balance Sheet Report with drill-down functionalities. The top-level information contains consolidated balances for a group of accounts such as current assets, fixed assets, etc. The drill-down functionality helps the user to select a line item (e.g., fixed assets) and drill-down further to a detailed list (secondary list) which displays various components of the fixed assets such as land, buildings, machinery, etc.
Some general ledgers provide the functionality to maintain summary accounts that contain consolidated balance for the group of accounts clubbed under that summary account. Users may drill-down to individual group accounts by using the drill-down functionality.
Drilling down on balances in the general ledger may take the user to line level transactions constituting those balances.
Drilling down on balances will take the user to the journal where the transaction has been captured in the source system.
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.
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.
Record to report (R2R) is a finance and accounting management process that involves collecting, processing, analyzing, validating, organizing, and finally reporting accurate financial data. R2R process provides strategic, financial, and operational feedback on the performance of the organization to inform management and external stakeholders. R2R process also covers the steps involved in preparing and reporting on the overall accounts.
In most of the automated financial systems, you can define more than 12 accounting periods in a financial year. This article will explain the concept of the adjustment period and the benefits of having adjustment periods. Adjustment periods have their inherent challenges for the users of financial statements and there is a workaround for those who don’t want to use adjustment periods.
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.
In every journal entry that is recorded, the debits and credits must be equal to ensure that the accounting equation is matched. In this article, we will focus on how to analyze and recorded transactional accounting information by applying the rule of credit and debit. We will also focus on some efficient methods of recording and analyzing transactions.
The general ledger is the central repository of all accounting information in an automated accounting world. Summarized data from various sub-ledgers are posted to GL that eventually helps in the creation of financial reports. Read more to understand the role and benefits of an effective general ledger system in automated accounting systems and ERPs.
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.
Five Core General Ledger Accounts
Typically, the accounts of the general ledger are sorted into five categories within a chart of accounts. Double-entry accounting uses five and only five account types to record all the transactions that can possibly be recorded in any accounting system. These five accounts are the basis for any accounting system, whether it is a manual or an automated accounting system. These five categories are assets, liabilities, owner's equity, revenue, and expenses.
GL - Unearned / Deferred Revenue
Unearned revenue is a liability to the entity until the revenue is earned. Learn the concept of unearned revenue, also known as deferred revenue. Gain an understanding of business scenarios in which organizations need to park their receipts as unearned. Look at some real-life examples and understand the accounting treatment for unearned revenue. Finally, look at how the concept is treated in the ERPs or automated systems.
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