General Ledger integration
Because General Ledger account codes can vary drastically from one company to the next, flexibility is provided by the system to accommodate a variety of requirements. This topic describes some of the features that help you manage your General Ledger activities.
Account codes can contain up to four sections: division, department, account, and sub-account. The sum of the length of the variables must be a maximum of 18 digits. This includes four digits for the division and department sections, and a maximum of ten digits for the account and sub-account sections. Each section can be separated by a delimiter, which can be a period (.), comma (,), dash (-), or slash (/). Three characters are allowed for the delimiters, in addition to the 18 digits that are used to identify the account number. The account code structure must be specified in SA Administrator Options-Financials-Account Structure before you begin setting up accounts in GL Account Setup.
After you have set up account codes, you can enter them in other modules with one asterisk or “wild card” in the division section as long as your company is not set up for divisional accounting. For example, if your company has several divisions and General Ledger account codes are set up consistently with similar department, account, and sub-account numbers, you can specify the Sales Control account as *-1-400-01. This means the Sales Control account for all divisions within your company will be affected by a posting. This enables you to post several divisions with minimal keystrokes. This also reduces your chances for entry errors. If you intend for only one division to be affected, you must manually specify the division number.
The hierarchy is a series of five (5) levels used by the system to determine the correct account to use when a posting transaction is created. Before setting up your system default account codes, you must carefully consider the hierarchy used by the system to ensure the desired results are obtained from your updating functions. This hierarchy is called the General Ledger integration hierarchy.
The General Ledger integration hierarchy is an updating process that automatically begins checking at the first level and continues down through each level until the hierarchy finds an account to post to. If no General Ledger accounts are found to post to in any of the upper levels, the posting is to Level #5, the suspense account. The suspense account is a safety net to temporarily hold a posting that contains an invalid account number. The suspense account allows the transactions to remain in balance. You must identify the reason a transaction has passed through the hierarchy to the suspense account. Then you must make the correction so the suspense posting can be reversed and posted to the correct account.
For certain functions, such as Level #1, an account code is defaulted by the system automatically in the General Ledger distribution view when necessary. You can override this default code and specify a different one.
This hierarchy is used by the system to search for the default account code:
- Level 1 - Entry: The account code specified by the operator is used.
- Level 2 - Module: Account codes defined at the module level are used.
- Level 3 - Operator: Account codes set up in SA Operator Setup-Other Options-General Ledger for the operator are used.
- Level 4 - R&D Operator: Account codes set up in SA Operator Setup-Other Options-General Ledger for the R&D operator are used.
- Level 5 - Suspense: Account codes set up in SA Company Setup for temporary posting that must be corrected.
Level #1 - Entry
This level is used when an entry is manually posted, an account is overridden, a write off amount is entered, or manual adjustments to a General Ledger account are made. Manual overriding is possible when the General Ledger Distribution window is displayed in these system functions:
- Vendor Invoice Center Entry
- Customer Transaction Entry
- Customer Cash Receipt Entry
- GL Transaction Entry
- Product Adjustment Entry
- Product Adjust Non-Stock/Direct Order Entry
When the General Ledger Distribution window is displayed, you can manually specify the account number you want to use. Alternatively, you can perform a lookup and choose an account number from the list. After you specify the account number, the name of the account is displayed in the Account Name column, which is non-enterable. You can distribute the amount to as many as 500 General Ledger accounts.
If a manual method of posting is not used, the hierarchy searches for an account in Level #2 is.
Level #2 - Module
If General Ledger account numbers are established at the module level, the account number defaults are used for transaction posting in these functions:
Vendor Setup
- AP Control
- Bank
- Discount
- AP Expense/Asset
Two additional codes can be set up in this function for expensed addons.
Customer Setup
- AR Control
- Bank
- Discount
- Income
The account codes set up in Customer Setup establish two asset, one income/expense, and one income account for each customer record.
CR Bank Setup
The account codes set up in CR Bank Setup establish a General Ledger account number for each bank. The account is used for posting cash transactions performed by Sales Order Entry tendering, Vendor Invoice Center Entry manual payments, Vendor Entry Pay Invoices Due Report, lock box payments, and Customer Cash Receipt Entry.
- Bank Account
General Ledger Profit Distribution
The account codes set up in establish a profit distribution account number and a clearing account for comparison reference.
- Income or Retained Earnings
- Profit Clearing
Product Warehouse Description Setup
The account codes set up in Product Warehouse Description Setup establish warehouse level General Ledger accounts for intracompany and interdivisional warehouse transfers.
- Addon Expense
- Addon Revenue
- Inventory in Transit
- Addon in Transit
- InterDiv Inventory
Product General Ledger Distribution Setup
To provide a variety of methods and combinations to post to accounts, the options in allow you to distribute to the General Ledger income statement by any of these options:
- Product Category
- Warehouse
- Customer Type
- Sales representative
- Product Category and Warehouse
- Product Category and Customer Type
- Product Category and Sales representative
The fields available in Product General Ledger Distribution Setup depend on the selection you made in .
These account codes are used if they do not already exist in Customer Setup. The accounts in Customer Setup always take precedence at the module level for sales transactions that are created through Customer Transaction Entry.
- OE Gross Sales
- OE Direct Order Sales
- OE Line Discount
- OE Order Discount
- OE Cost of Goods
- OE Direct Order COGS
- IC Cost of Goods Adjustment
- OE Restock Charge
- WT Cost Adjustments
- IC Rebate Cost Adjustment
- OE Sales Returns
The options in allow you to distribute to the General Ledger balance sheet by any of these options:
- Product Category
- Warehouse
- Product Category and Warehouse
Selecting Both allows for a more specialized distribution.
The fields available on Product General Ledger Distribution Setup depend on the selection you made in .
These account codes are used:
- Inventory
- IC Uninvoiced Inventory
- IC Direct Order Inventory
- IC Non-Stock Inventory
- OE Core Charge
- IC Cost Adjustment
- IC Physical Adjustment
- IC Rebate Due
- Work In Process Inventory
- Work In Process Write Off
SA Sales Use Tax Setup
You are required to set up a master tax record. This record calls for the completion of the these General Ledger accounts for the various types of records on SA Sales Use Tax Setup:
| ID# | Record Type |
|---|---|
| 1 | Federal |
| 2 | State |
| 3 | County |
| 4 | City |
| 5 | Other |
These account codes are used:
- Sales Tax
- Use Tax
- Transit Tax
- Excise Tax
SA Tariff Rate Setup
Tariff tax is calculated whenever a vendor is set up in Vendor Setup with foreign currency, and product is received from this vendor during Purchase Receipt of Inventory Entry.
- Tariff Payable
SA Goods and Services Tax Setup
If you are a Canadian company, use the SA Goods and Services Tax Setup to set up the tax rate for PST taxes for each province.
- PST Liability
SA Currency Setup
The account code set up in SA Currency Setup establishes a General Ledger account for tracking losses and gains on currency exchange.
- Loss/Gain Currency Exchange
SA Order Entry Addon Setup
The account codes set up in SA Order Entry Addon Setup establish a General Ledger account(s) for Sales Order Entry addons, which are user-defined and selected from the table in Sales Order Entry. They can automatically be displayed from Customer Setup.
- OE Addons
SA Table Code Value Setup - Purchase Order Addons
The account codes set up in SA Table Code Value Setup-Purchase Order Addons establish General Ledger accounts for purchasing goods and materials. They can be added when the purchase order is entered or defaulted from Vendor Setup.
- Expensed Addons
- Uninvoiced Addons
Warehouse Transfer
The account code set up in establishes a General Ledger account for an in-transit inter-company warehouse transfer.
- Intercompany WT
Service Warranty
The account code set up in establishes a write-off account associated with the use of warranty claims.
- Warranty Claims Write off
SW Setup Warranty Claim Types
The account codes set up in SW Setup Warranty Claim Types establish General Ledger accounts associated with the processing of warranty claims.
- Warranty Claims Receivable
- Warranty Claims Receivable Offset
- Warranty Claims Write off
Level #3 - Operator
Operators performing automatic distributions and transaction entry functions can set up with General Ledger account code defaults. Set up account codes for functions the operator will post to. If account numbers are not specified at the operator level, and an attempt to post to an automatic distribution or transaction entry function is made, the hierarchy defaults to the a) Level #4-R&D Operator account codes, or b) the Product General Ledger Distribution Setup account codes, depending on the account. For General Ledger integration to occur, the Update GL option in the SA Operator Setup-Other Options-General Ledger section must be set to Yes for each module the operator can update.
Operator level accounts, established at this level, are used for department-level General Ledger accounting purposes in these modules:
- Customer
- Vendor
- Product
- Sales
- Purchase
- Warehouse Transfer
Customer AR accounts
All Customer AR accounts are superseded by the accounts set up in Customer Setup.
- AR Control
- AR Sales
- AR Bank
- AR Service Charge
- AR Discount
- AR Write Off
Vendor AP accounts
All Vendor AP accounts, with the exception of the AP Trade Unmatched account, are superseded by the accounts set up in Vendor Setup. If the AP Trade Unmatched account is not specified here, a suspense posting is made.
- AP Control
- AP Bank
- AP Discount
- AP Expense/Asset
- AP Trade Unmatched
Product
All Product inventory control accounts, with the exception of the IC Uninvoiced Addons account, are superseded by the accounts set up in Product General Ledger Distribution Setup. If the IC Uninvoiced Addons account is not specified here, a suspense posting is made.
- IC Control
- IC Direct Order
- IC Non-Stock
- IC Cost Adjustment
- IC Uninvoiced Inventory
- IC Cost of Goods Adjustment
- IC Uninvoiced Addons
- IC Physical Adjustment
- IC Rebate Cost Adjustment
- IC Rebate Due
- IC Work In Process
- IC Work In Process Write Off
Sales
Account codes that are entered on module-specific setups might supersede the Sales Order Entry General Ledger accounts.
- OE Gross Sales
- OE Direct Order Sales
- OE Cost of Goods
- OE Direct Order COGS
- OE Down Payment
- OE Uninvoiced Cash Sales
- OE Line Discount
- OE Order Discount
- OE COD
- OE Core Charge
- OE Lump Sum Bill
- OE Restock Charge
- OE Sales Returns
Purchase
To expense order discounts automatically, the Capitalize Order Discount option in SA Administrator Options-Documents-Purchase Orders-Accounting must be cleared, and the discount must be entered on the Purchase Order Entry header and deducted from the invoice amount in Customer Cash Receipt Entry.
- PO Order Discount
Warehouse Transfer
The WT Cost Adjustments account is similar to the IC Cost of Goods Adjustment, but is only used for transferred goods.
- WT Cost Adjustments
Level #4 - R&D Operator
The R&D Operator is created automatically when you create each company record. The R&D Operator is used by the system for General Ledger defaults. The R&D Operator accounts are set up in SA Operator Setup and default if the system cannot find a valid account to post at the entry, module, or operator levels. The R&D Operator level is more commonly used than level #3. R&D Operator is used if one General Ledger account code exists per company or per division. If the R&D Operator is deleted, or accounts have not been set up for the R&D operator, suspense accounts are updated.
If the majority of users post to the same account codes, you can leave the account codes on the operators’ records blank and let the system use the accounts on the R&D record. If some operators require unique accounts, they can be specified on the operators’ SA Operator Setup record.
Level #5 - Suspense
The suspense debit and credit accounts are the last resort when other attempts to find a General Ledger account to post to in levels 1-4 fail. The suspense accounts are set up at the company record level in SA Company Setup. They must be set up to open journals and post to the General Ledger.
For simplicity, use the same number in both the debit and credit fields. Place this account number at the end of the account number sequence. If all the upper levels are correctly established, the suspense account should never be used. If the suspense account is used, you must determine why the posting failed to find a valid account at the entry, module, operator, or R&D operator levels. Monitor the suspense accounts daily so you can spot problems and make corrections to correct your financial reports. When a suspense account has a posting, determine which account should have been updated. Manually reverse the posting from suspense and post into the correct General Ledger account number.
- Suspense Debit and Suspense Credit